PIA set to report first profit in two decades
Listen to article
Pakistan International Airlines (PIA) is poised to report its first annual profit in more than two decades, marking a significant turnaround for the national carrier as it moves forward with plans to sell the airline, according to documents seen by Bloomberg.
PIA recorded earnings per share of Rs5.01 for the year ending in December, its first profitable year since 2003, based on audited financial statements.
The results are expected to be submitted to the airline's board for approval before being released publicly. PIA did not respond to a request for comment.
The results mark a dramatic recovery for an airline that, in recent years, has faced mounting financial losses, including aircraft being impounded at foreign airports, canceled flights, and close calls with default.
Regular bailouts from the government were the main lifeline for the airline, though these funds have now been exhausted.
Pakistan's efforts to sell the airline last year failed, as the initial bid fell short of the minimum price of about $306 million. However, the government is making another attempt to privatize PIA, with initial bids expected later this month.
To make the sale more attractive, the government has removed about 75% of the airline's debt from its books. The move has led to renewed interest from potential buyers, with companies that previously participated in the bidding process now expressing greater confidence, according to Usman Bajwa, secretary at Pakistan's privatization commission, in February.
Operational gains in recent years have been offset by the significant burden of debt servicing.
However, PIA has been working to achieve operational profitability by implementing reforms, including reducing its workforce by nearly 30%, shutting down unprofitable routes, and improving fleet utilization.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
4 hours ago
- Express Tribune
An untenable budget
Listen to article The federal government has laid out an ambitious budget of Rs17.573 trillion for FY26 while pinning its hopes on an exalted growth rate of 4.2%. This euphoric document has come a day after the Economic Survey posted a dismal picture of the economy — all targets were missed for the third consecutive year amid a growth rate of mere 2.7%. The budget proposes a cut in overall spending and banks heavily on tightening tax measures while estimating inflation at 7.5%. The lion's share from the deficit-laden economy goes to debt-servicing, at Rs8.207 trillion. And as foreseen, the defence takes a major share from revenue collection with a 20% rise — at Rs2,550 billion or 1.97% of GDP. The hope-line seems to be an estimated $71 billion in cash flows, $7 billion in taxes and $8 billion in royalties, apart from $5 billion from Reko Diq as well as privatisation of the national flag carrier, PIA, and Roosevelt Hotel in New York. The government is also expecting $25 billion from IT exports over the next five years. Moreover, a surplus in the current account, rise in remittances to the tune of $32 billion and the stability of the rupee are other hallmarks that posits a yearning of the economy's turnaround amidst positive ratings from Moody's and Fitch. The budget has set a tax collection target of Rs14,131 billion, an 8.95% increase from previous year, wherein expenditure of civil administration would be Rs0.97 trillion, pensions Rs1.06 billion, and power and other sectors Rs1.19 billion. The finance minister, while delivering the budget speech, pointed out that 390,000 high-value non-filers of tax were identified and Rs300 million recovered from them, and at the same time the revenue machinery has been able to post a 100% increase in the number of tax filers, taking the revenues to Rs105 billion. A 10% raise in salaries from grade 1-20 employees, a 7% hike in pensions and Rs6,000 allowance for the disabled constitute the only voluble theme of the budget speech. The government also promised to reduce the income tax slabs by balancing inflation and take-home income. An 18% tax on imported solar panels and imposition of taxes on online businesses and digital marketplaces are among the features making the budget anti-growth. However, no new tax on fertiliser and pesticides has been proposed. Similarly, the proposition to reduce the super tax to 5% on corporate sector earning from Rs200 million to Rs500 raises eyebrows given that all other sectors are reeling under pressure. Last but not least, the restive province of Balochistan as well as the merged districts in Khyber-Pakhtunkhwa, which had a leeway with taxes in the past years, will now have to pay sales tax starting from 10% for five years — and that is not a sound economic initiative. The most startling revelation is the confession from the finance wizard that the revenue machinery lacks the muscle to achieve the tax targets. This means reforms and not statistics or book-keeping should be the focus of the economy.
Express Tribune
a day ago
- Express Tribune
Railways posts gross earnings of Rs65b
Pakistan Railways (PR) has recorded gross earnings of Rs65.17 billion during July-March fiscal year 2025, marking a robust 21 per cent increase compared to Rs53.70 billion in the same period last year, driven by a significant rise in passenger and freight volumes on the national rail network. According to the Economic Survey 2024-25 presented on Monday by Minister for Finance Muhammad Aurangzeb, the data highlights Pakistan Railways as a cornerstone of the country's transportation infrastructure, playing a vital role in fostering national integration and economic development. Meanwhile, the Economic Survey 2024-25, highlighted a significant financial turnaround for PIA, the national flag carrier. According to the survey, PIA recorded an operating profit of Rs9.3 billion in 2024, more than double its Rs3.9 billion profit in 2023. This marks the second consecutive year of operational profitability for the airline, reflecting continued progress under a strategic reform plan.
Express Tribune
a day ago
- Express Tribune
Transport, communication show mixed performance
The finance minister's Economic Survey 202425 reveals a mixed performance in Pakistan's transport and communication sectors. While Karachi Port showed growth in cargo handling and Pakistan Railways posted higher earnings, challenges persisted. Notably, cargo at Port Qasim declined by 1.6%, and National Highway Authority (NHA) projects dropped from 123 to 105, indicating a slowdown in infrastructure development. Transport and communication remain central to the government's development priorities, as reflected in the Public Sector Development Programme (PSDP) for FY202425. An allocation of Rs161.26 billion was made for 105 NHA projects, including Rs149.28 billion for ongoing works and Rs11.98 billion for new schemes. This marks a reduction of 18 NHA projects compared to the previous year's PSDP, which had set aside Rs156.50 billion for 123 projects. Of that, Rs99.36 billion was allocated for 68 ongoing schemes and Rs48.12 billion for 52 new ones. Three Build-Operate-Transfer (BOT) schemes were also included with a budget of Rs9.02 billion. Currently, the NHA manages 48 national highways, motorways, and strategic roads spanning 14,480kms. Despite fewer projects, the overall allocation rose from Rs156.50 billion to Rs161.26 billion, indicating a shift toward fewer but potentially larger or high-impact initiatives. Pakistan Railways operates 449 locomotives over a network of 7,791kms. In JulyMarch FY2025, gross earnings reached Rs65.17 billion, up from Rs53.7 billion in the same period last yeara notable improvement in operational revenue. Pakistan International Airlines (PIA) recorded mixed results. The national carrier's operating revenue declined by 16.8% in CY2024 to Rs204.16 billion, down from Rs238.5 billion in 2023. However, PIA cut operating expenses by 20.8%, bringing them down to Rs194.8 billion. This cost control enabled PIA to report an operating profit of Rs9.3 billiona rare positive despite falling revenues. Speaking to The Express Tribune, Arif Habib Limited's Head of Research Sana Tawfik said the transport and communication sector showed moderate progress in FY2025, supported by the government's Rs268 billion development allocation. Key entities like the NHA, Pakistan Railways, and PNSC sustained operations under CPEC and regional connectivity plans, though fiscal constraints and delays limited faster growth. Tawfik noted that consistent service across road, rail, maritime, and postal networks maintained essential connectivity. Future growth, she added, hinges on quicker execution of strategic projects aimed at cutting transport costs, digitising supply chains, and adopting energy-efficient freight solutions. She stressed that targeted investments in high-speed corridors, digital infrastructure, and cross-border trade routes are essential for improving efficiency, attracting private investment, and positioning Pakistan as a regional trade and logistics hub. The Pakistan National Shipping Corporation (PNSC) operates 10 vessels with a combined 724,634 DWT capacity. PNSC's profit fell to Rs8.98 billion during JulyMarch FY2025, compared to Rs14.28 billion last year. The decline is attributed to a reduced fleet sizedown from 12 ships last year. Port Qasim Authority handled 33.8 million tonnes of cargoincluding bulk, liquid bulk, and general cargoin JulyMarch FY2025, a decrease of 1.6% from 34.3 million tonnes the previous year. In contrast, Karachi Port's cargo and container handling rose to 40.4 million tonnes in JulyMarch FY2025, compared to 38.9 million tonnes last year, showing resilience in maritime operations. KTrade Securities equity trader Ahmed Sheraz said the sector showed steady progress with Rs161.26 billion allocated for highways, Pakistan Railways earning Rs65.17 billion, and PIA posting a Rs9.3 billion profit. However, lower cargo handling at some ports signals trade challenges. Growth in broadcasting, with PEMRA's Rs2.1 million revenue and the expanded reach of Pakistan Broadcasting Corporation (PBC), highlights untapped potential. PEMRA currently oversees 139 satellite TV stations and 34 channels with broadcasting rights, down slightly from 140 and 35 last year. It contributed Rs2.1 million to the national exchequer in JulyMarch FY2025, compared to Rs2.75 million last year. JS Global's Head of Research, Waqas Ghani, noted that Pakistan's Rs268 billion allocation for transport and communication supports the URAAN Pakistan initiative to enhance connectivity, trade, and digital access. Pakistan Railways' improved 21% year-on-year earnings reflect growing efficiency and confidence in rail transport. PBC manages around 80 units across 32 stations. In FY2025, it received Rs6.4 billion, with 96% of funds released by March 2025 to support operations and content production.
