Pakistan International Airlines (PIA) has announced a major milestone in its long struggle for financial recovery, reporting a net profit of Rs 2.26 billion for FY2024. This marks the first time in 21 years that the airline has returned to profitability, ending a prolonged period of financial turmoil that included operational losses and a mountain of debt.
According to the PIA spokesperson, the airline reported an operational profit of Rs 3.9 billion, with an operating margin of over 12%, aligning PIA with some of the world’s most successful airlines. The figures are being hailed as a major achievement, especially when considering the airline’s history of continuous financial losses, including aircraft impoundments at foreign airports, flight cancellations, and near-default status in recent years.
A Long-Awaited Turnaround for PIA
PIA, which last posted a profit in 2003, has been through a series of comprehensive reforms and restructuring initiatives over the past few years. These measures included reducing the airline’s manpower and expenditures, consolidating profitable routes, and shutting down loss-making ones. Additionally, PIA took substantial steps to restructure its balance sheet, aiming to alleviate the substantial debt burden that had previously crippled the airline’s financial performance.
These changes have now started to bear fruit, with the airline showing signs of operational efficiency and profitability, making it a much more attractive entity for privatization. The success of this turnaround has been crucial for the Pakistani government, which has long struggled to privatize the airline.
Privatization Push Intensifies
Khawaja Asif, the Defence Minister who also holds the aviation portfolio, celebrated the positive results, stating that the privatization process of PIA would now benefit from the airline’s improved financial standing. The government is aiming to sell the airline, with initial bids due later this month, after an earlier failed attempt to privatize it last year.
According to reports from Bloomberg, the government has significantly reduced the airline’s debt load by shifting about three-quarters of PIA’s debt to government accounts. This move has helped make the airline a more attractive proposition for potential buyers, with Usman Bajwa, the privatization secretary, noting increased interest from companies in the sale.
The airline’s recent turnaround and improved financial results make it an appealing prospect for privatization, especially as the airline looks to free itself from the shackles of past debt and attract the right investor.
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