Pakistan International Airlines (PIA) is planning to shut down if flights for Saudi Arabia, China, Gulf, and Europe sectors are not resumed in a couple of months, reported a local media outlet.
The report quoted a source saying that the Finance Division has worked out three different scenarios to compute the net deficit of the national flag carrier after the complete suspension of flight operations to Saudi Arabia, China, Doha, Kuwait, and Milan due to coronavirus.
According to the report, PIA has incurred a revenue loss of over Rs 1.7 billion only on Saudi Arabia sector due to ban on the entry of Umrah pilgrims by the Saudi government for last 19 days and added that if this ban is not lifted, the loss will extend to around Rs. 3 billion till the end of March.
The report while quoting a source stated that if UAE, operating at 40 percent of normal schedule and rest of the international operating at 75 percent of the normal schedule, was also suspended along with Saudi Arabia, China, Doha, Kuwait, and Milan due to COVID-19, PIA would face a Rs. 3.93 billion net deficit, despite saving Rs. 4.07 billion on account of operational expenditures.
If all international routes are stopped the estimated net revenue loss will escalate to Rs. 6.34 billion per month after deducting Rs. 6.47 billion as operational expenditures, noted the report.
The source also revealed that PIA, which had a plan to bring its profit and loss statement at breakeven in 2020, is now facing difficulties to pay salaries to its 11,700 employees.
PIA spokesman said that the airline’s major revenue chunk came from KSA especially Umrah, followed by the UK and Europe. With KSA operations coming to halt on March 16 (Monday), PIA’s losses will surge at an unprecedented scale.
Currently, the national airline has suspended China, Japan, Qatar, Kuwait, Oman, Saudi Arabia, and Italy routes. The whole international travel industry is faltering and PIA is no exception. IATA estimates that global airlines might lose 15-18 percent of the total revenues in the next few weeks.