ISLAMABAD: Pakistan International Airline Corporation (PIAC) has suffered Rs154.5 billion losses in last three years and per day revenue of the entity witnessed a massive decline owing to the Covid restrictions.
This was disclosed by the Aviation Division to the Economic Coordination Committee (ECC) of the Cabinet meeting presided over by Finance Minister Shaukat Tarin.
The meeting was informed that the PIAC has been facing staggering losses from 2010 to 2018.
Around 50 percent of the total accumulated losses were because of debt servicing and exchange loss on "legacy loans" resulting in constant increase in the losses.
The present government has focused on the improvement of the PIAC by making drastic changes in the management as well as in the Board of Directors of the PIAC.
Apart from that every support is being given to the national carrier to bring it out of the crises.
The government support and managerial reforms in the PIAC have shown reduction in total losses as evident from the audited figures that the entity losses from Rs67.328 billion in 2018 were reduced to Rs52.602 billion in 2019, and Rs34.643 billion in 2020.
However, since start of 2020, the situation changed drastically with the Covid-I9 outbreak whereby, all airlines were adversely affected due to the pandemic and unprecedented travel bans/lockdowns imposed by the various governments.
The PIAC was no exception to it and suffered significant dip in revenues and cash flows.
The International Air Transport Association (IATA) had stated in its forecasts that the financial performance of industry will be worse in 2021 because of travel restrictions owing to difficulties in controlling the virus variants.
Accordingly, the PIAC is also under severe strain with limited operations at 15 to 20 percent of pre-Covid levels.
The ECC was informed that all the key routes including Kingdom of Saudi Arabia (KSA), Gulf, Malaysia, the UK, and Canada have been affected badly and the PIAC has lost its key Umrah as well as Hajj seasons during the previous and the current year.
The gravity of the situation could be analysed from the fact that the daily revenue of the PIAC in these days is around Rs50 million to Rs70 million, whereas, it used to be around Rs350 million to Rs400 million per day, making sustainability/continuity of operations increasingly difficult.
Copyright Business Recorder, 2021
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