Eye-watering losses

Published November 13, 2023
For the first six months of 2023 Source: PIAC annual reports
For the first six months of 2023 Source: PIAC annual reports

In the minute it took you to read this little piece, Pakistan International Airlines lost over Rs234,000 or roughly equivalent to the minimum wage of about seven people.

PIA’s losses are so staggering that it is hard to wrap one’s mind around them. Even back in 2005, PIA was so deep in losses that one hour’s losses could have paid nearly three dozen people for a month (assuming a minimum wage of Rs15,000).

According to PIA’s financials, its profit from operations was Rs3.56bn in the first six months of the current fiscal year. However, exchange rate losses and finance costs were Rs60.7bn. PIA is stuck in the same trap as Pakistan — borrow to stay afloat and then drown in servicing debt.

Not that the airline was not up to its own shenanigans. A September 2019 audit reveals that between 2016 and 2017, PIA operated 46 flights without passengers, causing a loss of $1.1m. It also flew 36 Haj flights with completely empty seats. Then there was the fake degrees scandal, where over 100 PIA employees had fraudulent academic qualifications.

So, how has PIA escaped privatisation or closure for all these years? Partly because it is a symbol of pride and glory of bygone days. Mostly because it has a strong labour union — the PIA’s HR head recently said that the airline would close down only over their dead bodies — and immense liabilities, which make it challenging to entice investors.

Different governments have talked about privatising the airline at various points, but each attempt was always shelved for the next government. There is little room to procrastinate now with the IMF calling the shots, which may be good because it seems the powers-that-be cannot make the hard decisions without external pressure.

PIA cannot continue to operate at such a high rate of losses, not when its losses per second could feed a poor family for a week.

Published in Dawn, The Business and Finance Weekly, November 13th, 2023

Opinion

Editorial

Military convictions
Updated 22 Dec, 2024

Military convictions

Pakistan’s democracy, still finding its feet, cannot afford such compromises on core democratic values.
Need for talks
22 Dec, 2024

Need for talks

FOR a long time now, the country has been in the grip of relentless political uncertainty, featuring the...
Vulnerable vaccinators
22 Dec, 2024

Vulnerable vaccinators

THE campaign to eradicate polio from Pakistan cannot succeed unless the safety of vaccinators and security personnel...
Strange claim
Updated 21 Dec, 2024

Strange claim

In all likelihood, Pakistan and US will continue to be ‘frenemies'.
Media strangulation
Updated 21 Dec, 2024

Media strangulation

Administration must decide whether it wishes to be remembered as an enabler or an executioner of press freedom.
Israeli rampage
21 Dec, 2024

Israeli rampage

ALONG with the genocide in Gaza, Israel has embarked on a regional rampage, attacking Arab and Muslim states with...