PIA equity, liabilities reach Rs185.6b

LAHORE - Total equity and liabilities of Pakistan International Airlines Corporation (PIAC) has risen from Rs 139.669 billion to Rs 185.600 billions on 31, December 2008.
Sources confided that airline endeavoured to narrow down its losses through re-evaluation of assets but it failed to achieve the desired result. In spite of revision in accounting practices pointed out by auditors in report, where PIA has re-evaluated its assets from Rs.35.485 billion in Jan 2008 to Rs 114.5 billion in Dec 2008, the auditors have just qualified it on the basis of PIA statement with a note that PIA has not made any inspections or re-evaluation of the declared assets.
A Chartered Accountant working in a leading foreign accountancy firm of the country, on condition of anonymity, stated that for the first time in last over 20 years the airlines Internal Auditor is not carried out through CA.
The sources counting factors behind the losses said that the airlines fleet utilisation has declined while the number of pilots, engineers and other employees increased.
PIA flew a total of 141,479 revenue hours in 2006 that have decreased to 132,378 in 2008. The airline submitted a business plan in 2002 which was based on daily utilisation of 16 hours per day for the Boeing 777. The aircraft financing was based on higher revenue generation and the purchase and payments were based on optimum revenues generated in US dollar values that were to show a rise, while utilisation of PIAs Boeing 777 fleet has dropped to under 11 hours per day.
The eight B777 aircraft delivered to PIA in March 2008 at the cost of $149.79 million financed by ABN Amro with US Exim Bank.
The projected 16 hours per day utilisation has declined further in 2009, by the reduction in frequency of flights to USA from 9 to just 2 or 3 flights a week, with similar reductions on all sectors, sources claimed. Another factor of losses is nepotism and posting of cronies to key international stations like USA, Canada, Jeddah, Gulf etc.
In September 2009, PIA just operated 18 extra sections for Umra in the peak Ramadan period instead of planned 38 while in 2008 it operated over 48 flights in the Ramadan peak season.
PIAs sole consolation is that in spite of a worldwide recession PIA subsidiares hotels Roosevelt in New York and Hotel Scribe in Paris have earned a profit of $13.549 million in 2008. However, PIA Airport Hotel has earned a pre-tax profit of Rs 12.68 million.
When contacted, PIA spokesman Syed Sultan said that total losses of PIA by December 2008 were Rs 35.8 billion while negative equity of Rs 32.5 billion and liabilities of Rs72 billion have been noted.
He said that though Umra flights in 2009 passengers load was more than that of the year 2008, hence denied any loss to the corporation from Umra flights.
He said that there was no term of revenue hours used in the airlines, therefore, no question of competition of hours.