KARACHI: Pakistan International Airline (PIA) has reduced its operational losses by 33.7 percent and nearly achieved operational break, even in the year 2020, despite global aviation slowdown due to the ongoing pandemic situation.
According to the financial results announced by the national flag carrier for FY 2020, the airline has shown a 33.7 percent reduction in operational losses. The financial results of audited accounts for FY 2020, which has been submitted to the Pakistan Stocks Exchange (PSX), showed that the airline had reduced its operational losses from Rs6.130 billion in 2019 to Rs680 million in 2020. The airline would have easily covered the said losses if revenue streams had not fallen by nearly 35.7 percent.
It said that the PIA's revenue has dropped from Rs147 billion achieved in 2019 to Rs94.989 billion in 2020, mainly due to Covid-19 restrictions that affected the airline’s routes and slashed overall PIA operations by nearly half.
The pandemic, which hit the industry in March 2020, saw nearly halting of all the operations, domestic and international, for months, which only started to resume partially from July onwards. However, July also saw the EASA ban imposed on PIA, which hit one of the biggest UK and Europe routes. The restrictions on Umrah & Hajj flights also impacted the revenues of PIA.
PIA responded by focusing on special charter flights, repatriation, and relief flights which helped the airline, retaining its foothold in the market and generated valuable revenue from alternative sources, which made the Covid-19 restrictions and ban related bite on revenues much milder than initially predicted.
Moreover, special charters flights for NDMA and Pakistan Army helped the airline retain valuable foreign exchange.
PIA said that the airline during the year 2020 oversaw several reforms such as cutting down of loss-making units such as Speedex and curtailing on loss-making routes and cost reductions without compromising on service reliability and standards. PIA thus is strictly adhering to the path of recovery it devised for itself, which saw the year 2019 tackling the governance issues and plugging revenues leakages, 2020 as consolidation and planned operational break-even for the year 2021.
The airline management also re-negotiated with financial institutions for rescheduling loans and re-negotiated the lease payments of high lease aircraft acquired in the past. PIA also undertook a Voluntary Separation Scheme (VSS) accepted by nearly 2,000, which will have a considerable impact on the expense of 2021, the airline said.
In his statement, CEO PIA Air Marshal Arshad expressed his satisfaction with the financial results and acknowledged the team effort put forth by PIA and the support extended by all the stakeholders, including Pakistan's government.
Copyright Business Recorder, 2021