PIA posts Rs38 bln loss in first quarter of 2023

KARACHI: Pakistan International Airlines (PIA) has released its financial results, revealing a loss of Rs 38 billion in the first quarter of the year 2023, ARY News reported on Wednesday.

According to the report, PIA’s loss for Q1 2023 is 171 per cent higher compared to the same period in 2022, posing a worsening financial situation of the National flag carrier.

Meanwhile, the airline’s revenue for the first three months of the current year is recorded at Rs 61 billion. The depreciation of the Pakistani Rupee against US dollars is one of the primary factors which contribute to PIA’s financial woes.

The depreciation of the Pakistani rupee against the US dollar results in a loss of Rs21 billion in PIA’s finances, while the increase in the oil prices and interest rates further added the financial burdens to the airline.

PIA’s operating expenses increased from PKR 15 billion to PKR 43 billion due to administrative incompetence.

The financial report highlighted that the PIA’s operating expenses have surged from Rs15 billion to Rs43 billion, mainly due to the administration incompetence.

According to PIA spokesman, PIA’s revenue increased by 74 per cent, reaching Rs59 billion, surpassing Rs34 billion compared to the previous year, while the operational profit also increased, reaching at Rs 4.1 billion.

The PIA spokesperson claimed that the volume of loans on the national airline and exchange rates was the primarily reason for an increase in overall losses.

Last year, the kibor interest rate was 10 per cent, but this year it increased to Rs19 billion, resulting in a finance cost of Rs16 billion rupees in the first quarter.

Similarly, due to significant changes in exchange rates, there was a total loss of Rs21 billion compared to the previous year.

“It is pertinent to mention here that as an international airline, PIA’s expenses, are incurred up to 80 per cent in foreign currency,” the spokesman concluded.