Pakistan International Airline's 54th Annual General Meeting was held at a local hotel. Managing Director PIA, Nadeem Khan Yousufzai in his first address to the shareholders at the meeting said that year 2010 proved to be a challenging year. While the global economy is gradually moving out of recession, the aviation industry has still not been able to fully recover from the crisis that engulfed it in the wake of the oil price hike.
He said that due to the recent events in the Middle East, oil prices have again started to climb which is affecting the aviation industry to return to profitability. PIA, also, is affected by the prices coupled with inflation in the country. The airline does not get any subsidy from the government on oil purchase, he added. Yousufzai said that PIA is going into expansion and is in the process of getting additional aircraft and discussions are underway with PIA board of directors and government of Pakistan in this regard. The airline has also implemented 'web ticketing' for the convenience of passengers. This, he added, will also result in savings for the airline. He also said PIA is now focusing on revenue increase, network expansion and savings.
In his concluding remarks, MD PIA said PIA has already submitted its 'business plan' to government of Pakistan. Based on the financial projections contained in the business plan, the airline is expected to start earning profits, provided the plan is approved and significant financial support made available to the corporation.
In his address, President of AGM and Member PIA Board, Husain Lawai informed the shareholders that during year 2010, the airline achieved highest revenue in excess of rupees 107.532 billion as compared to Rs 95.564 billion in 2009 with a revenue growth of 12.52 percent. The airline also registered an increase in the seat factor from 70 percent in 2009 to 74 percent in 2010 and achieved an operating profit of Rs 720 million. With world GDP forecast to rise by 3.1 percent during 2011, it is expected that demand for air travel (both passenger and cargo segments) would increase by 5.6 percent and 6.1 percent respectively in year 2011, he added.
Lawai further said that the airline achieved an operating profit of Rs 720 million. However, its overall financial position was mainly affected by fuel prices, from 149.39 Rs per US gallon in 2009 to 194.57 per gallon in 2010. He informed that fuel cost constitutes 42 percent of the total airline operating cost. The yearly basket of crude oil price increased to US $77.45 per barrel in 2010 from US $61.06 per barrel in 2009 showing an increase of almost 27 percent. PIA will have to link oil prices with fuel surcharge as oil prices are beyond the control of the airline, he maintained.
President AGM also said that operating expenses other than fuel decreased by 3.88 percent over the last year. This was due to the decrease in exchange loss by Rs 4,409 million over last year due to stable exchange rate in 2010 as compared to the devaluation of 6.71percent of Pak rupee against dollar in 2009, he added. During the AGM, Malik Nazir Ahmed was declared re-elected as board member whereas Yousuf Waqar was declared elected as board member by the shareholders other than the federal government.-PR