RECORDER REPORT

ISLAMABAD: The Pakistan International Airlines (PIA) has incurred an estimated Rs12 billion financial losses following suspension of its flights operation worldwide; however, it has no plan, like other airlines, to lay-off its employees, high-level sources said.

On March 21, 2020, the federal government decided to suspend all kinds of international and domestic flights till April 4 to contain coronavirus spread. The flights operations were later suspended to April 28.

Major airlines across the world have announced layoffs, wage cuts and unpaid leave for staff as cash-strapped firms wait for bailouts amid the coronavirus pandemic, which has dried demand and brought travel to a virtual halt.

Despite huge losses, unlike private carriers across the world, the PIA has so far not laid anyone off. Recently, the PIA management decided to revise the fare of the flights.

The decision to revise the fare was taken in an attempt to address the complaints of stranded Pakistanis abroad.

“If PIA opted to revise the fare downward, it will further increase the losses,” the aviation experts said. “Other airliners’ businesses are dependent on cash flow but PIA owns majority of airplanes of its fleets using international flights. One of the reasons that the financial losses of PIA is minimum,” spokesman PIA told Business Recorder. The PIA is currently operating “humanitarian flights”, but the employees are more worried about the health risks from these special flights repatriating stranded citizens from various countries.

The coronavirus has inflicted drastic effects on the profitability of international airlines.

Sources said that the PIA might also ask for a bailout package from the federal government. Earlier, the government decided to sell out one of the hotels owned by the Pakistan International Airline Company located at prime location in New York (USA) to inject some money, however, the privatisation of Roosevelt Hotel is deferred till next financial year 2020-2021.

The International Monetary Fund (IMF) asked the Government of Pakistan to complete audit report of financially troubled PIA by the end of December 2019 by reputable international firm. 

It is one of the conditions for six billion US dollars loan package approved by the IMF for Pakistan.

The PIA has recorded a loss of Rs12 billion and the suspension of flight operations caused a deficit of Rs6.91 billion to the CAA.

However, it has asked on-rotation one-third of its staff to avail 10 days of their already accumulated personal leave.

Partial flights were started for the PIA earlier this month and they are expected to expand after 28 April.

The PIA’s humanitarian flights are helping Pakistanis stranded across the world.

The employees of the flag carrier are worried about the health risks from these special flights despite, pilots and staff being provided personal protective equipment.