PIA has announced its financial results for FY 2020 as it submitted audited accounts with the Stock Exchange of Pakistan. What has been termed as one of the worst year in decades for the global aviation industry whereby even largest players in the market have obtained huge bailout packages from their respective governments to stay afloat, PIA came up with a noteworthy performance, nearly breaking even on operational losses and reducing its overall losses by 33.7%.
According to the airline’s audited financial results for the year 2020, PIA reduced its operational losses from
PKR 6.130 Billion in 2019 to less than PKR 680 million in 2020, which would have been easily covered if revenue streams had not also fallen by nearly 35.7%. PIA achieved revenue of PKR 94.989 Billion, down from PKR 147 Billion achieved in 2019, the main reason for which was COVID restrictions affecting all of PIA’s routes, reducing the overall operations by nearly half. The pandemic which hit the industry in March 2020, saw nearly halting of all the operations, domestic and international for months, which only started to resume partially from July onwards. However July also saw the EASA ban imposed on PIA which hit one of the biggest routes of UK and Europe.
The bread winning operations of Umrah & Hajj flights also impacted the revenues of PIA. PIA responded by focusing on special charter flights, repatriation and relief flights which helped it retain its foothold in the market and generate valuable revenue from alternative sources, which made the COVID and ban related bite on revenues much milder, than initially predicted. Special charters for NDMA and Pakistan Army helped the nation to retain valuable foreign exchange within the country.
During the year 2020, PIA oversaw a number of reforms such as cutting down of loss making units such as Speedex and curtailing on loss making routes and cost reductions without compromising on service reliability and standards. PIA thus is strictly adhering to the path of recovery it devised for itself which saw year 2019 tackling the governance issues and plugging revenues leakages, 2020 as consolidation and planned operational break even for the year 2021.
The airline management also re-negotiated with financial institutions for rescheduling of loans and also re-negotiated the lease payments of high lease aircraft that were acquired in the past. PIA also undertook a Voluntary Separation Scheme accepted by nearly 2,000 which will have considerable impact on the expense of 2021.
CEO PIA Air Marshal Arshad expressed his satisfaction on the financial results and acknowledged the team effort put forth by PIA and the supported extended to it by all the stake holders, including the Government of Pakistan. He said that PIA is making all efforts to face and cope up with COVID scenario and though the outlook remains challenging in 2021 as well, it is hoped that with the support of Government of Pakistan, our Pakistani customers and dedication of PIA employees, we will emerge stronger than before. The testing times shall soon be over and the strength acquired by PIA with the reforms, restructuring and financial discipline will bear fruit in the near future.