How Stupid Does The PIA Think We Are?
As the government bends over backwards to keep the airline afloat, the grateful people at PIA have this to say:
THIS is apropos of your editorial , “ PIA’s nosedive” (Oct 21). PIA is nowhere near bankruptcy. It is meeting all its financial obligations itself without any subsidy from the government.
It has credit worthiness among global financial institutions and material supplying agencies and it is meeting all its financial obligations towards its creditors, vendors and posting operational profits. Fuel is not the only factor, still a major factor of financial losses to the airline.
The other factor is the devaluation of the Pakistani rupee against US dollar.
As an accounting requirement, PIA had to book the exchange difference on the entire amount of outstanding US dollar loans which contributed a net exchange loss of Rs24.1bn.
This exchange loss alone is almost 180 per cent of last year’s total company losses.
The high fuel prices, which reached $147/barrel in July 2008, contributed an additional expense of Rs15.5bn, the expense would have increased to Rs18.4bn if stringent savings, realised through fuel-efficient policies, capacity and route rationalisation plans, would not have been activated.
Both the rupee-dollar disparity and fuel prices were beyond PIA’s control and compelled a loss of Rs39.7bn during 2008.
The PIA management contained non-fuel expenses to just seven per cent as compared to an increase of 27 per cent in its net revenues. PIA’s total yearly percentage of employee expense is much lower than global averages.
For some understanding and as comparables it may be mentioned that the International Air Transport Association (IATA) reported global airline losses of $16.8bn in 2008. The projected airline industry loss for 2009 as projected by IATA is $11bn.
SYED SULTAN HASAN
General Manager, PIA
Karachi
THIS is apropos of your editorial , “ PIA’s nosedive” (Oct 21). PIA is nowhere near bankruptcy. It is meeting all its financial obligations itself without any subsidy from the government.
It has credit worthiness among global financial institutions and material supplying agencies and it is meeting all its financial obligations towards its creditors, vendors and posting operational profits. Fuel is not the only factor, still a major factor of financial losses to the airline.
The other factor is the devaluation of the Pakistani rupee against US dollar.
As an accounting requirement, PIA had to book the exchange difference on the entire amount of outstanding US dollar loans which contributed a net exchange loss of Rs24.1bn.
This exchange loss alone is almost 180 per cent of last year’s total company losses.
The high fuel prices, which reached $147/barrel in July 2008, contributed an additional expense of Rs15.5bn, the expense would have increased to Rs18.4bn if stringent savings, realised through fuel-efficient policies, capacity and route rationalisation plans, would not have been activated.
Both the rupee-dollar disparity and fuel prices were beyond PIA’s control and compelled a loss of Rs39.7bn during 2008.
The PIA management contained non-fuel expenses to just seven per cent as compared to an increase of 27 per cent in its net revenues. PIA’s total yearly percentage of employee expense is much lower than global averages.
For some understanding and as comparables it may be mentioned that the International Air Transport Association (IATA) reported global airline losses of $16.8bn in 2008. The projected airline industry loss for 2009 as projected by IATA is $11bn.
SYED SULTAN HASAN
General Manager, PIA
Karachi
(Courtesy: Dawn, Letters to the Editor)
Labels:
Minority Reports,
Pakistan
1 comment:
very good article, xcellent writer and faNtaBulOus blog. Very mindblowing :D :P xD
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