PIA’s debt and losses exceed assets 300 times, reports private TV

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PIA, the national airline of Pakistan, is facing severe financial challenges as its debt and losses have skyrocketed, surpassing the value of its assets. The investigation team reveals that in 2022 alone, PIA incurred a historic loss of 88 billion rupees, pushing its total debt to a staggering Rs750 billion.

Over the past five years, PIA’s debt has escalated by an alarming 267 billion rupees. The airline now owes 350 billion rupees to banks. The total value of PIA’s domestic and foreign assets amounts to $1.03 billion.

In 2004, PIA recorded a loss of Rs4.5 billion, which has surged to Rs88 billion in 2022. This continuous downward spiral is a cause for concern.

The investigation report by Zahid Gishkori for Hum News further reveals that despite operating only 28 planes, PIA employs approximately 9,000 individuals. Shockingly, this means that there are 321 employees per plane, which raises questions about efficiency and productivity.

The annual expenditure on salaries, bonuses, medical benefits, and pensions for PIA employees stands at a staggering 28 billion rupees. Moreover, the 22 planes currently in the airline’s fleet are between 18 and 34 years old, resulting in additional maintenance costs amounting to 144 billion rupees.

Notably, PIA’s aircraft expenses account for 21% of the total expenditure, reaching a staggering 12 billion rupees.

While PIA’s total assets abroad are valued at 1.03 billion dollars, its properties within the country are worth approximately 20 billion rupees. Regrettably, a valuable building owned by PIA in the Netherlands has remained unutilized for several years.

In comparison, Turkish Airlines employs 89 individuals per plane, with a workforce of 37,000 for 414 planes. Similarly, Qatar Airways has 50,000 employees serving 202 planes, and Etihad employs 18,500 individuals for 79 planes.

The annual number of passengers on PIA’s international flights currently stands at one crore, with expectations to reach Rs20 million by 2026.

According to a PIA spokesperson, efforts are underway to make the airline profitable. The spokesperson cited retired employees’ pension, the impact of the COVID-19 pandemic, and the devaluation of the rupee as significant factors contributing to the financial losses.

To address the situation, a “Right Sizing” campaign has been implemented, resulting in the layoff of over 5,700 employees in six years. Proper management of the workforce could potentially save Rs12 billion annually.

According to the IATA Business Plan Survey, a well-designed business strategy could enable PIA to generate an annual profit of $1.07 billion.

Notably, the most valuable assets owned by PIA include the Roosevelt Hotel in New York and The Scribe Hotel in Paris. While the Roosevelt Hotel is incurring substantial losses, The Scribe Hotel is partially profitable.

To alleviate the financial burden, the Privatization Commission has suggested seeking investments from financial advisors for major business ventures.

Additionally, PIA Investment Plan Committee has entered into an agreement with a private company to lease hotel rooms, aiming to transform the hotel from a loss-making entity to a profitable one.

Pakistan International Investment Limited has also developed a reinvestment plan for PIA assets in India, Uzbekistan, and other countries. The sales offices and accounts manager offices in India are valued at 285 crores and are operational.

To ensure transparency, PIA should focus on implementing effective financial management strategies, optimizing employee utilization, and exploring opportunities for reinvestment to stabilize its financial position and secure its future.