MONDAY OCTOBER 24: PIA briefs CCOR on restructuring plan: Rs 18.702 billion losses incurred in 18 months

ISLAMABAD: The Cabinet Committee on Restructuring (CCOR) has been informed that Pakistan International Airlines (PIA) has suffered Rs 18.702 billion loss during last 18 months, with average monthly loss of Rs 1.039 billion, it is learnt.
Sources said that the high-ups of PIA recently gave a presentation to the CCOR about the restructuring plan to bring out the national flag carrier from the financial crisis, and sought a hefty cash injection, which has been resisted by Finance Minister Abdul Hafeez Sheikh so far.
An official told Business Recorder that the meeting was informed that expenditure of PIA has been Rs65.95 billion during the first half of 2011 against total revenue of Rs55.83 billion, depicting the bleak financial situation of the organisation. The top management was trying to convince the CCOR that financial restructuring plan designed by them, which require financial support of the government, would enable them to save Rs13.788 billion yearly, and make the PIA a financially viable organisation.
Sources in the Finance Ministry said that the argument could not satisfy the Finance Ministry and other members of the CCOR on financial support without undertaking administrative reforms in the organisation. The management of PIA said that restructuring plan would save Rs 1,149 billion yearly. The operational restructuring would save monthly Rs 409 million, fleet structuring Rs474 million and financial restructuring 266 million.
The meeting was informed that operating loss of the PIA has gone to over Rs 5.09 billion in six months of 2011 and financial loss to Rs4.93 billion. The CCOR meeting discussed at length the PIA restructuring plan, with special reference to injecting financial assistance to the airline in line with the government's vision of growth. The meeting also deliberated on fuel cost savings, and induction of new aircraft into the airline with reference to the fleet renewal plan.
Hafeez observed that the losses to the airline cannot be met until the cost is controlled, and stressed upon revamping of the financial and operational sectors which needed to be identified and rectified. The meeting decided that the injection of finance in the airline would further be discussed in the meeting of the CCOR this week.