LAHORE: Pakistan International Airlines (PIA) released their financials for Q3CY22 to the Pakistan Stock Exchange on Monday. The company is ending the quarter with a net loss of Rs25 billion which increases their accumulated net loss for the year to a total of Rs67 billion. This is a 58 per cent year-on-year (YoY) increase from its accumulated loss of Rs42.7 billion over the same period last year.
The most significant change in PIA’s financials is the 35 per cent quarter-on-quarter (QoQ) increase in its revenue from Rs36.68 billion to Rs49.4 billion. This also translates to a 128 per cent YoY increase from Q3CY21. Both QoQ and YoY increases are attributable to more countries relaxing their travel requirements, and PIA subsequently reestablishing direct flights linkages with different countries after overcoming much of its fake pilot scandal.
PIA’s gross losses of Rs163 million are dampened due to the increase in its revenue. The most significant increase in its expenses was a 36 per cent increase in the cost of fuel that amounted to an increase of Rs6.7 billion. The increase is duly attributable to both the increase in the cost of fuel from Q2CY22 to Q3CY22 and the increase in PIA’s operations that have increased the overall need for fuel. PIA was also able to reduce its losses from operations by 50 per cent QoQ from Rs6.4 billion to Rs3.2 billion. This is despite an 82 per cent QoQ reduction in its other income from Rs 2.23 billion to Rs 392 million.
Finally, PIA was able to reduce its QoQ loss by 9.2 per cent from Rs 28.2 billion to Rs 25.5 billion. Going forward, the results are unpredictable as of now. PIA is set to resume direct flights to China and Turkey, however, it still remains locked out of the lucrative UK and European markets due to the fake pilot scandal from 2020. The licence issues has led to the country’s national airline to lose out to what some report as 1,000 flights to and from the UK annually. This matter is likely to be resolved at the earliest in 2023.
Furthermore, PIA will also experience stiffer competition going forward on both domestic and international routes. The former is due to airlines such as AirSial and Fly Jinnah now directly competing with routes that were considered to be PIA’s home turf. The latter is a result of airlines such as Virgin Atlantic doubling down on the flights to and from Pakistan. Virgin Atlantic in particular will be looking to establish itself on flights to and from the UK and Pakistan whilst PIA attempts to escape its current predicament.
