PIA posts Rs4.6bn loss despite Rs26bn accounting profit 

ISLAMABAD: Pakistan International Airlines (PIA) ended the last year with a net loss of Rs4.6 billion, despite reporting an accounting profit of Rs26 billion, a figure driven by technical tax adjustments, not actual earnings. 

A government report on state-owned enterprises (SOEs) revealed the profit came from recognising a deferred tax asset worth Rs30 billion. This move involved treating past losses as future taxable income. But the Central Monitoring Unit (CMU), which prepared the report, cautioned that the gain should not be mistaken for real operating success. 

The report comes after a major financial restructuring of Pakistan International Airlines Corporation Limited (PIACL). Around Rs660 billion in legacy debt and non-core assets were shifted to a new holding company, PIAHCL. This separation allowed PIACL to continue as a focused airline business, while PIAHCL took over old obligations through state support and asset sales. 

The clean-up sharply improved PIACL’s balance sheet. Total liabilities dropped. Long-term financing shrank from Rs295 billion to Rs13 billion. Finance costs fell from Rs79 billion to Rs10 billion. Total assets now stand at Rs187 billion. 

Still, the airline’s core operations remain under pressure. It earned Rs204 billion in revenue and posted a slim operating profit margin of 2.25 per cent. But high costs, especially Rs75.6 billion in aircraft fuel, hurt its bottom line. 

Gross profit rose to Rs22 billion, but overheads stayed heavy. Admin and distribution costs remained elevated, while foreign exchange losses reached Rs2.34 billion. 

The CMU urged urgent reforms: a modern fleet, fuel hedging, and performance-based HR policies. While the debt load is lighter, the report stressed that real recovery will take more than accounting changes. PIA, it said, needs bold, strategic fixes to stay in the skies. 

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