PIA’s loss for the year increases to Rs67bn
Pakistan International Airlines (PIA) released their financials for Q3CY22 to the Pakistan Stock Exchange on Monday. The company is ending the quarter with a net loss of Rs25 billion which increases their accumulated net loss for the year to a total of Rs67 billion. This is a 58 per cent year-on-year (YoY) increase from its accumulated loss of Rs42.7 billion over the same period last year.
The most significant change in PIA’s
financials is the 35 per cent quarter-on-quarter (QoQ) increase in its revenue
from Rs36.68 billion to Rs49.4 billion. This also translates to a 128 per cent
YoY increase from Q3CY21. Both QoQ and YoY increases are attributable to more
countries relaxing their travel requirements, and PIA subsequently
reestablishing direct flights linkages with different countries after
overcoming much of its fake pilot scandal.
PIA’s gross losses of Rs163 million are
dampened due to the increase in its revenue. The most significant increase in
its expenses was a 36 per cent increase in the cost of fuel that amounted to an
increase of Rs6.7 billion. The increase is duly attributable to both the
increase in the cost of fuel from Q2CY22 to Q3CY22 and the increase in PIA’s
operations that have increased the overall need for fuel. PIA was also able to
reduce its losses from operations by 50 per cent QoQ from Rs6.4 billion to
Rs3.2 billion. This is despite an 82 per cent QoQ reduction in its other income
from Rs 2.23 billion to Rs 392 million.
Finally, PIA was able to reduce its QoQ loss
by 9.2 per cent from Rs 28.2 billion to Rs 25.5 billion. Going forward, the
results are unpredictable as of now. PIA is set to resume direct flights
to China and Türkiye, however, it still remains locked out of the lucrative UK
and European markets due to the fake pilot scandal from 2020. The license issues
have led to the country’s national airline to lose out to what some report
as 1,000 flights to and from the UK annually. This matter is likely to be
resolved at the earliest in 2023.
Furthermore, PIA will also experience stiffer
competition going forward on both domestic and international routes. The former
is due to airlines such as AirSial and Fly Jinnah now directly competing with
routes that were considered to be PIA’s home turf. The latter is a result of
airlines such as Virgin Atlantic doubling down on the flights to and from
Pakistan. Virgin Atlantic in particular will be looking to establish itself on
flights to and from the UK and Pakistan whilst PIA attempts to escape its
current predicament.
Source: Profit Pakistan