Pakistan International Air Posts Wider Loss on Fuel Costs
Pakistan International Airlines Corp. (PIAA), the nation’s largest carrier, posted a first-quarter loss, weighed down by rising fuel and labor costs.
The net loss widened to 7.9 billion rupees ($87 million) in the three months ended March 31 from 4.2 billion rupees, the airline said in a statement to the Karachi Stock Exchange today. Revenue was 28 billion rupees.
PIA, based in Karachi, also reported a loss for 2011 as it struggled with a workforce of more than 21,500 people to run a fleet of 40 planes. In comparison, Singapore Airlines Ltd. employed 21,997 people, as of March 2011, for a fleet of 100 planes. PIA paid more for fuel in the first quarter because prices averaged about 11 percent higher than a year earlier in Singapore.
Overstaffing is a “major problem,” said Umar Hafiz, an analyst at Arif Habib Ltd., a brokerage in Karachi. The carrier “will have to embark on an aggressive strategy to increase its competitiveness.”
Net loss for 2011 was 25.9 billion rupees, compared with a 20 billion-rupee loss in the previous year. Revenue rose 8 percent to 127.5 billion rupees.
The carrier fell 0.9 percent to 2.29 rupees at close in Karachi. It has risen 16 percent this year, compared with a 25 percent gain for the benchmark Karachi Stock Exchange All-Share Index.
PIA in February announced an order for five Boeing Co. (BA) 777-300ER planes, worth about $1.5 billion at list prices. Airlines usually get discounts on large orders. The carrier also took five options.
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