Contrary to the tall claims of the government transforming Pakistan International Airlines (PIA) into a profitable organization, the national flag carrier has registered a massive loss of Rs. 32.7 billion in the first half of 2019.
From January to June 2019, PIA’s losses stood at Rs. 32.746 billion before tax. The losses are expected to jump somewhere between Rs. 38-39 billion after taxation.
According to the annual report of PIA for 2018, the national flag carrier registered a total loss of Rs. 59.685 billion. It was the highest ever loss for PIA since the years 2008-2011 when it was headed by Ijaz Haroon and Nadeem Yousafzai, the former MDs who were allegedly involved in financial embezzlements causing losses of billions to the national exchequer.
Mismanagement, lack of transparency, and weak audit controls remain the underlying reasons that impede PIA in becoming a profitable organization.
Since 2015, PIA Investments Limited, a subsidiary of PIA, has also registered losses while the senior management continues to enjoy all kinds of perks and bonuses. Dr. Najeeb Samie, the current MD of PIA Investments Limited, was set to retire in 2015. However, because of his connections, Dr. Najeeb managed to receive extensions in his retirement. Dr. Najeeb is a member of the board of directors of HBL and also serves as a director in several tourism entities in France and the USA.
Perhaps that is why the meetings of the board of directors of PIA Investments Limited have always been held in either New York or Paris and never in Pakistan. Not only is this a violation of rules of PIA Investments Limited but it also prevents the Auditor General of Pakistan to be a part of these meetings. In the meeting of the board of directors, a summary of the accounts in the past 6 months, pricing mechanisms, and quantification of the expenditures of the organization were discussed.
Moreover, since the days of Ijaz Haroon, unqualified individuals have been appointed as Chief Internal Auditors. The primary requirement for an individual to be installed at this post is that they must be a qualified Chartered Accountant. So far, MBA graduates and audit diploma holders have been chosen to conduct internal audits of the PIA.
The board of audit hasn’t met in 2019. Audit experts have expressed serious concerns that no meeting of the Audit Board of PIA has been held yet.
The only positive point in the report is that PIA’s revenue increased by 44% during the first six months of 2019 compared to the same period in 2018. However, nearly 60% of this revenue was earned in foreign currency through international sales. The revenue from January to June was hit by a 40% rupee devaluation and a 19% increase in the cost of fuel in comparison to H1 2018.
Via: Pakistan Today