Pakistan International Airlines (PIA) has posted a net loss of PRs13 billion ($121 million) in the third quarter of 2013, compared with a loss of PRs10.2 billion a year earlier.
Revenue for the quarter remained unchanged at PR27.6 billion, while operating costs decreased by 5.4% to PR28 billion, the carrier's quarterly financial report shows.
The airline’s operational loss increased by 43% to PRs9.15 billion, aided by higher currency exchange losses of PRs4.67 billion, which was an increase from PRs300 million over the previous corresponding period.
PIA’s chairman Muhammad Ali Gardezi attributed the decline in overall revenue to a fall in capacity. Factors such as a shortage of operational aircraft, declining yields, a sharp depreciation of the Pakistani rupee and high operating costs have led to significant losses. Financial charges also increased as the carrier borrowed heavily to meet its working capital requirements.
For the nine months to 30 September, the carrier posted a net loss of PRs30.3 billion, up by 49% from PRs20.4 billion. Revenue declined by 10% to PRs81.6 billion from PRs91 billion.
Despite its poor financial performance, Pakistan's government has pledged to continue supporting the carrier using measures such as reimbursing financial charges and offering sovereign guarantees. The airline is planning to lease new aircraft to reduce its operating costs.
Earlier this year, there was strong speculation that the government would partially privatise PIA as part of a new aviation policy under development. However, the proposal was met with stiff resistance from the airline's unions and has not progressed any further.