* Reduction in operational cost by Rs 14.22bn under the plan
* Replacement of 40% national carrier’s fleet with addition of 10 new aircrafts also included
ISLAMABAD: Five year business plan of the Pakistan International Airlines (PIA) aims at doubling of the airlines revenues in five year period, reduction in operational cost by Rs 14.22 billion, replacement of 40 percent of national carrier’s fleet with addition of 10 new aircrafts and replacement of 6 existing aircrafts.
According to the official details of Ministry of Defence provided to the parliament, government of Pakistan (GoP), is examining a five-year business plan prepared by PIAC duly approved by their Board of Directors on the direction of Ministry of Defence and Ministry of Finance.
PIA does not incur any non-development costs but have direct (cost of services) and indirect costs (distribution, administrative and others) relating to operations. To control the indirect costs and to improve the financial health of the corporation, government of Pakistan, is examining a five-year business plan prepared by PIAC duly approved by their Board of Directors on the direction of Ministry of Defence and Ministry of Finance.
Salient of the plan are to strengthen culture of ethics and compliance, aggressive marketing plans for revenue enhancement, doubling revenues in 5 years, operational restructuring to cut costs and improve efficiencies, resulting in savings of Rs 14.22 billion which is 5 percent of the controllable cost, replacement and expansion of the fleet (10 additions, 06 replacements, 40 percent of present fleet), recapitalisation to pay for legacy losses. PIA is confident that these strategies combined with the support of the GoP will put the airline on path of profitability and return PIA to its past glory.
The total income of the national carrier Pakistan International airlines stood at Rs 133.66 billion during 2010 and January-March period of 2011, July-March period of the last fiscal year 201-11 compared with expenditure of Rs 147.091 billion in the said period showing an income shortfall of Rs 13.431 billion.
Incomes: Income from passenger was Rs 87.212 billion in 2010 and Rs 23.198 billion in first quarter of the ongoing fiscal year 2011, making a total of Rs 110.41 billion in three quarters of the last fiscal year 2010-11 (July-March 2010-11). Revenues from Hajj have been estimated at Rs 8.531 billion in 2010. Incomes from excess baggage were Rs 1.072 billion in 2010 and Rs 290 million in first quarter of the year 2011.
Total incomes from freight income have been recorded at Rs 6.406 billion during 2010 and Rs 1.390 billion during the first quarter of the 2011. Air lifting of mail and post has enable the national carrier to bag Rs 440 million during 2010 and Rs 102 million during fist quarter of the 2011. National carriers has earned Rs 461 million from aircraft charters (Passenger, Cargo) during 2010 and this has earned Rs 477 million to it in first quarter of the year 2011. By rendering engineering services to other airlines national carrier has earned Rs 1.250 billion in 2010 and Rs 222 million in first quarter of the year 2011. Other revenues of the national carrier were Rs 2.161 billion in 2010 and Rs 504 million in first quarter 2011.
Expenditure: Total expenditures of PIA during 2010 and first quarter of the year 2011 were Rs 147.091 billion. The cost of Fuel and Oil born by the national carrier during the said period was Rs 44.707 billion in 2010 and Rs 13.107 in first quarter of the year 2011.
Passenger Services expenses amounted to Rs 3.694 billion in the 2010 and Rs 936 million in first quarter of the year 2011. Aeronautical, Landing, Handling charges that have been paid by the national carrier were Rs 10.422 billion in 2010 and Rs 3.139 billion in first quarter of the year 2011. Maintenance cost born by the national carrier amounted to Rs 6.796 billion in 2010 and Rs 1.679 billion in first quarter of year 2011. General and Administrative expenses were recorded during 2010 at Rs 5.243 billion and Rs 1.472 billion during first quarter of the year 2011.
Depreciation cost born by the national carrier estimated at Rs 6.214 billion in 2010 and Rs 1.473 billion in 2011. Employee pay, allowances and other benefits have put a financial burden of Rs 18.569 billion in 2010 and Rs 4.382 billion during first quarter 2011.
IS and Communication services cost born by the airlines stood at Rs 1.469 billion in 2010 and Rs 497 million in first quarter of year 2011. PIA spent on advertising services Rs 782 million in 2010 and Rs 218 million in first quarter of year 2011. Expenses on GDS were Rs 1.555 billion in 2010 and Rs 307 million in first quarter of year 2011. Finance Cost was recorded at Rs 9.300 billion in 2010 and Rs 2.393 billion in first quarter of year 2011.
Exchange rate losses were Rs 2.092 billion during 2010 and Rs 734 million in first quarter of the year 2011. Other expenses of PIA were Rs 6.039 billion during 2010 and Rs 1.341 billion during first quarter of year 2011.
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