Pakistan International Airlines (PIA) losses can be as high as 6.3 billion rupees per month if the situation worsens due to the rapidly spreading corona virus and the airline decides to completely stop international flights.

In such a scenario, operating losses that have been eliminated in the recent past are posted again.

The national airline’s finance department estimates that the airline could incur losses in the order of 2.6 to 6.3 billion rupees based on three different scenarios that it prepared to assess the coronavirus impact on the airline. There are 3 likely options:

Option 1

The airline will discontinue flights to Saudi Arabia, Doha, Kuwait, Milan and China in full, which will result in a loss of PKR 5.4 billion in sales, while the net deficit after operating costs will be PKR 2.6 billion becomes.

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Option 2

The airline plans to operate only 40% of the scheduled flights to the UAE and 75% of the flights on the remaining international routes. At the same time, flights to Saudi Arabia, Doha, Kuwait, Milan and China will be discontinued. According to the official, following this plan, the airline is expected to lose PKR 8 billion in revenue and the net deficit is expected to be PKR 3.9 billion.

Option 3

The airline is considering discontinuing all international flights, after which it would lose sales of PKR 12.8 billion with a net deficit of PKR 6.3 billion.

When asked to comment on the matter, PIA spokesman Abdullah Khan said a massive portion of the airline’s traffic came from Saudi Arabia, with the majority of the passengers being Umrah pilgrims.

The highest traffic for the airline comes to Great Britain and other European countries to Saudi Arabia.

“After stopping the Umrah pilgrimage in connection with UK ferry flights operated by PIA in the national interest to return stranded compatriots, losses can increase significantly,” he said.

He added that the airline had not yet made any official estimates of the total losses after the coronavirus outbreak, which would amount to billions of rupees per month. He feared that the airline would have to shut down all operations. PIA has currently suspended flights to China, Japan, Qatar, Kuwait, Oman and Italy, with flights to Saudi Arabia being discontinued as of March 18.

The entire international travel industry has stalled and PIA is no different. The International Air Transport Association (IATA) estimates that global airlines could lose 15 to 18% of their total revenue in the next few weeks.

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