Summary
- PIA is projected to incur a loss of Rs. 112 billion ($389 million) in 2023, which is an even larger loss than in 2022, raising concerns about the airline's future.
- With debts already reaching Rs. 742 billion ($2.5 billion), the viability of PIA in its current form is in doubt, prompting the government to confirm privatization plans.
- PIA's financial troubles have been worsened by safety concerns, leading to a ban from key markets. Passing an EASA safety audit offers a glimmer of hope for the airline's potential return to profitability.
Pakistan International Airlines (PIA) is on track for a loss of Rs. 112 billion ($389 million) in 2023. The prediction was made by the carrier's CEO, Amir Hayat, as reported by the Pakistani newspaper Minute Mirror.
No post-pandemic rebound for PIA
While other airlines around the world seem to be bouncing back from the pandemic stronger than ever, PIA does not appear to be having the same luck, with the airline incurring even larger losses than the Rs. 80 billion ($278 million) deficit posted in 2022. If PIA continues on its current path, insiders predict that its losses may reach Rs. 259 billion ($900 million) per year by 2030.
With debts already amounting to Rs. 742 billion ($2.5 billion), the viability of the airline continuing to operate in its current form has been brought into doubt. Earlier this week, the Pakistani Aviation Minister, Khawaja Saad Rafique, attested to PIA's dire financial predictions, saying that the privatization of the airline was the only way to alleviate its massive losses.
Just a few days later, the privatization plans were confirmed by the Pakistani government. A statement made at the time by the country's Ministry of Finance said,
"After deliberation, [the Cabinet Committee of Privatization] decided to include Pakistan International Airlines Co. Ltd in the list of active privatization projects of the ongoing privatization program, following an amendment in the law by the Parliament."
Discover the history of PIA with this report from the Simple Flying team.
Ongoing safety concerns
PIA's financial troubles have been exacerbated by serious safety concerns. In 2020, a fake license scandal saw 141 of the airline's pilots suspended and led to PIA being banned from three of its key markets - the EU, the UK, and the US. Prior to the ban, flights to the EU and the UK alone made up 37% of the airline's revenue.
However, a glimmer of hope came last month when the carrier reportedly passed the first stage of an EASA safety audit, signaling that a potential return to Europe may be on the cards. If and when they do return, flights to airports such as London Heathrow (LHR), Manchester (MAN), and Paris (CDG) will likely be operated by PIA's long-haul fleet of 12 Boeing 777s - six 777-200ERs, two 777-200LRs, and four 777-300ERs.
The aircraft are currently being put to use instead on the airline's somewhat limited long-haul network, which includes destinations such as Toronto (YYZ), Kuala Lumpur (KUL), and Beijing (PEK).
Airline officials will be hoping that privatization and potential re-opening of routes to the EU, the UK, and the US will be a turning point for the struggling airline - only time will tell if this proves to be the case.
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What do you think of PIA's predicted financial loss of Rs. 112 billion for 2023? Do you expect to see the airline recover anytime soon? Share your thoughts in the comments below.
Sources: Reuters, Minute Mirror, ch-aviation.com