Last year total losses reported by the national air carrier trumped the same tally from 2009 by about 400 percent. If the 9MCY11 corporate results are any preview to the companys annual performance in 2011, it seems poised to suffer even bigger losses, this time around. But, while a loss of Rs.16.36 billion in 9MCY11 compared to a loss of Rs.10.43 billion in the same period last year leaves little room for praise, still there are some inklings of improvements in certain areas. During the period under review, PIA saw its revenues grow by 12 percent over 9MCY10. While the growth in other costs was stymied, a whopping increase of 48 percent in aircraft fuel costs sliced gross profit from almost Rs.11 billion in 9MCY10 just under Rs.4.2 billion in 9MCY11. Over the same period, distribution costs also surged by 17 percent to reach Rs.5.8 billion. While the Company has managed to reign in administrative costs, exchange losses and keep finance costs at bay; it has failed to cushion the impact of volatile fuel prices despite having announced last year that the Company would take steps to hedge against fuel price shocks. Unlike 2010, the air carrier has also not added any new international destinations or significantly increased the frequency of domestic flights. As a result, PIAs passenger load factor (as reported by TWA) has worsened to 73.8 percent, after rising to 76 percent in 2010, from 70 percent in the previous calendar year. A Company official commented that the national air carrier will have to induct new aircraft in its fleet before it can significantly increase its total flight distance. That could mean more strain on the already burdened stakeholders of PIA.
==================================================== PAKISTAN INTERNATIONAL AIRLINES ==================================================== (Rs mn) 9MCY11 9MCY10 chg ==================================================== Revenue 91,616 81,480 12% Aircraft fuel 45,384 30,655 48% Other costs 41,546 39,962 4% Gross profit 4,686 10,962 -57% Gross margin 5% 13% Distribution cost 5,844 4,984 17% Admin cost 6,304 6,402 -2% Exchange loss 1,461 1,998 -27% Operating profits (9,319) (2,206) 322% Finance cost 7,696 7,211 7% After-tax loss 18,356 10,425 76% ====================================================
Source: KSE notice
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