PIA posts first net profit of Rs26.2bn in more than two decades, says defence minister

•  Airline earns operating profit of Rs9.3 billion in fiscal year 2024.
• PIA's operating margin exceeds 12%, matching top global carriers.
• Asif says PIA ready to capitalise on improved financial performance.

Pakistan International Airlines (PIA), the national flag carrier, has posted a remarkable financial recovery, according to  Khawaja Asif, Minister for Defence, in what could be a key turning point in the privatisation effort.

“The airline earned an operating profit of Rs9.3 billion in fiscal year 2024,” he revealed in a statement on Tuesday, highlighting the airline's return to profitability, with a net profit of Rs26.2 billion for the first time in 21 years. 

The airline's operating margin was over 12%, which puts it on par with some of the best global carriers. 

The last time the national airlines recorded a profit was in 2003. "This is a significant achievement, marking a real turnaround for the airline," he said.

The minister further explained that the airline underwent restructuring, focusing on cost control and rationalising its workforce. "We introduced comprehensive reforms under a strategy of route optimisation and financial discipline," he added.

Asif stated that the airline was now ready to capitalise on its improved financial performance. "The airline is now prepared to benefit from its financial recovery through privatisation," he said.

Meanwhile, the PIA's Board of Directors have approved the airline’s 2024 annual results, a PIA spokesperson said in a statement.

“The airline achieved earning per share of 5.01 rupees in year ended December, marking its first profitable year since 2003,” Bloomberg reported, citing audit documents — just as the government prepares to sell it off.

According to Bloomberg, the results mark a major turnaround for the airline, which had been facing financial turbulence, incurring heavy losses with its planes being seized abroad, flights cancelled, pushing it to the verge of default in recent years.

“The airline has only been able to survive because of regular bailouts from the government that have now run out,” the media group said.

Pakistan’s attempts to sell the financially-strapped airlines hit a tailspin because the sole bid received was lower than the $306 million minimum price — not even remotely close to the government’s targets.

Reports are that another push was in the pipeline, with initial bids due this month.

To sweeten the sale, about 3/4 of the airline’s debt was scratched from the government books.

“This time around, all the debt has been cancelled, and the former bidders have welcomed it with renewed interest, Usman Bajwa, the secretary at the privatisation commission, told Bloomberg in February.

Massive debt servicing amid mounting losses reversed all the operational gains previously.

PIA has been struggling for operational profitability for the past three years by enforcing reforms, including almost 30% job cuts, calling off unprofitable routes and better utilization of its fleet.

PIA has 23% of Pakistan's domestic aviation market, but its 34-plane fleet cannot compete with Middle Eastern carriers, which have 60%, due to a lack of direct flights, despite having agreements with 87 countries and key landing slots.