Corporate result: PIA losses drop 44% in first half of 2014

The Rs5.23 billion exchange gain, which came because of a stronger rupee against the dollar, offset a sharp 88% decline in other income. PHOTO: STOCK IMAGE 

KARACHI:  Financial loss of Pakistan International Airlines (PIA) came down 44.89% to Rs10.131 billion in six months to June 2014 over the same period of previous year as the airline booked exchange gains, higher revenues and a reduction in administrative expenses.

Helped by a rise of 11% in revenues to Rs53.34 billion, the national carrier posted a gross profit of Rs338 million for January-June 2014, reflecting an improvement in its flight operation, according to the airline’s financial statements.
The Rs5.23 billion exchange gain, which came because of a stronger rupee against the dollar, offset a sharp 88% decline in other income. In the first half of 2013, the airline had recorded an exchange loss of Rs1.46 billion.
Cost-controlling measures helped PIA reduce administrative expenses by 6.7% to Rs4.34 billion against last year’s Rs4.65 billion.
Heavy debt of Rs279 billion continues to take its toll on the cash-strapped airline as it has to bear the burden of ever increasing interest payments. This was reflected in the 21.7% rise in finance cost to Rs7.33 billion.
The second April-June quarter would have been even better had the airline not suffered an exchange loss of Rs370 million. Other income when compared with the previous year also saw a steep decline of 90%.
However, PIA was still able to record a gross profit of Rs441 million.
The government has been drip-feeding the airline by helping it arrange loans to pay salaries and vendors as its balance sheet, which carries a negative equity, does not encourage lenders.
The government has decided to sell PIA after its restructuring. The air carrier has been pushing the government for months to release funds for leasing narrow-body fuel-efficient planes.
It has a fleet of 30 active aircraft, but many of these are often grounded for want of repairs.