August 25, 2003	Monday	Jumadi-us-Sani 26

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ISLAMABAD, Aug 24: The Pakistan International Airlines has been unable to achieve its financial targets during the second quarter of 2003, mainly because of delayed delivery of new Boeing aircraft and ban on the use of Indian air space for overflights.

Information released by the finance ministry on Sunday says that delivery of three aircraft by the US firm Boeing is now expected in early 2004 instead of 2003.

The government is required under an agreement with the International Monetary Fund to release quarterly performance reports of major public sector corporations.

The PIA had pitched a target of Rs13.082 billion for revenue receipts for the quarter, however, it earned Rs10.914 billion, a shortfall of Rs2.168 billion.

The target was missed as the increase in capacity could not be achieved due to the delay in the delivery of the aircraft and non-restoration of regional and Far Eastern routes due to the ban on the use of Indian air space, said the report.

The PIA had projected a profit of Rs583 million for the quarter but it earned a profit of Rs50 million. During the same period last year, the airline had sustained a loss of Rs540 million.

It had projected an expenditure of Rs12.499 billion for the quarter, however, it spent Rs10.864 billion, mainly due to non-addition of aircraft and non-operation of regional and Far East routes.

The fixed capital expenditure of Rs22.059 billion against a target of Rs24.798 billion included a payment of $45.2 million made to the Boeing company for the purchase of three B-777 aircraft.

The new medium term loan of Rs5.675 billion also represents draw-down of $98.44 million from the Citibank, London, for making pre-delivery payments to the Boeing company.

At the time of finalization of financial improvement plan for PIA, it was visualized that the first batch of three B-777 would be received in early 2003. However, as per purchase agreement signed with the company in November 2002, the aircraft are to be inducted in early 2004. Hence, the new long term supplier’s credit of Rs16.748 billion was not availed.