ISLAMABAD (November 29 2002) : Pakistan International Airlines (PIA) missed the revenue target in the first quarter of current financial year by Rs 637 million because of non-operation of flights to Far East.
According to documents released by the federal government, which is part of government's commitments with the International Monetary Fund and the World Bank to make public the performance of major state-run companies, the airlines ended up with a revenue of Rs 11.599 billion in July-September period against the target of Rs 12.23 billion.
However, PIA generated more money than the target in respect of charter flights and other revenues due to United Nations charter operations and increase in the Engineering Services. But it remained short of revenue target by Rs 675 million, Rs 223 million and Rs 84 million in respect of passenger, cargo and excess baggage respectively due to non-operation of Fareast flights. Hence, the Corporation ended up the first quarter with total revenue of Rs 11.599 million ie less by Rs 637 million than the target, the document said.
PIA had anticipated an expenditure of Rs 888 million in the first quarter but the expenditure remained less by Rs 115 million due to non-operation of Far East flights.
The corporation had earmarked an expenditure of Rs 1809 million for provision of Engineering and Maintenance services. However, due to non-operation of Far East flights, expenditure was lower by Rs 352 million during the quarter.
It had produced for Rs 909 million for payment of Commission to the agent but due to lower revenue earnings, it paid only Rs 689 million during the quarter.
Against the earmarked Rs 250 million for payment of insurance coverage for their fleet the airlines paid less insurance premium to the insurance companies during the quarter due to easing of the world situation.
PIA had kept Rs 303 million for handling of traffic for the first quarter including meals during flights and ground meals and other user charges.
The expenditure remained lower than target due to less number of flights operated during the quarter. PIA had projected expenditure of Rs 328 million for provision of supplies including free tax supplies useable and consumables. However, due to running of less flights, the PIA incurred less expenditure by Rs 73 million.
Aircraft on lease from Cathay Pacific were given Finance Lease treatment in the Financial Statements of 2001 and accordingly payment of Lease rental for future years were shown as obligation under Finance lease amounting to Rs 3.6 billion. Subsequently, in August 2002 PIA opted to purchase these Aircraft and with the full payment ie US$ 55 million obligation appearing as payable settled full.
PIA originally did not foresee any need for taking a short-term loan facility during the first quarter. However, pursuant to the government/PIA decision regarding purchase of 6 leased aircraft, PIA had to arrange a short term Morabha loan facility of US$ 55 million for making payment to Cathay Pacific.