PIA's 315th Board of Directors' (BoD) meeting was held at the Airlines Head Office, Karachi. The BoD reviewed the commercial environment of PIA and various other issues confronting the national carrier. The Board was given a detailed presentation on PIA's proposed strategic plan.
Captain Mohammad Aijaz Haroon, Managing Director PIA briefed the Board on the short-term and long-term measures being taken by the Management for the revival of PIA. To turn the airline around into a profit making entity, support of GOP was highlighted and the areas necessitating their required backing was spelled out.
The Board approved the half-yearly accounts for the period January-June 2008, which shows an after tax loss of Rs 18 billion. Board noted that the major contributory factor in the loss was steep rise in oil prices hugely escalated the fuel bill of the airline and this could not be passed on to the passengers in the form of higher ticket prices due to market conditions.
Other contributory factor was unfavourable movement in Rupee-Dollar rate adversely impacting the profitability, financing cost increase significantly owing to new fleet inductions as well as additional borrowing to finance the subject losses. The European Union ban severely affected the operations and dented PIA's brand/image as well.
However, in spite of competitive pressures and adverse political/economic environment of the country, the airline achieved an overall revenue growth of 7.7 percent. The passenger revenue growth was 11 percent whereas the growth in cargo revenue was 3 percent. Board noted that despite the high rate of inflation, rupee depreciation and increase in employees' salaries, PIA Management succeeded in controlling the overall operating cost excluding aircraft fuel and achieved a reduction of 2.3 billion, denoting a decrease of 9 percent as compared to the same period last year.
The Board hoped that under the dynamic leadership of Captain Mohammad Aijaz Haroon, Managing Director and with the collective support of all the stakeholders, the management of the airline will work on additional measures to contain the high loss situation and bring about sustainable improvement in the near future that should make PIA into a profitable organisation.
The meeting was presided over by Chaudhry Ahmed Mukhtar, Federal Minister for Defence and Chairman PIA, and was attended by Syed Naseer Ahmed, Malik Nazir Ahmad, Javed Akhtar, Professor Mian Ijaz-ul-Hassan, Mubashir Iftikhar, Husain Lawai, Farrakh Qayyum, Secretary Finance, Kamran Rasool, Secretary Defence and Captain Mohammad Aijaz Haroon, Managing Director PIA.-PR