19 December 2004	Sunday	06 Ziqa'ad 1425

ISLAMABAD, Dec 16: The Pakistan International Airlines (PIA) suffered a shortfall of about Rs 669 million in its revenue earnings on account of under-utilization of two of its aircraft (Boeing 747- 200-Combi) in favour of foreign contracts.

Sources said the loss was incurred due to less number of flying hours when PIA's own Combi aircraft (Boeing 747-200) remained in hangars while foreign freighters were hired.

However, the PIA management in answers to a set of questions sent by Dawn, dismissed as incorrect the report of a shortfall of Rs 669m in earnings and also the reason cited for it. It said the flying hours of the two Combi aircraft during the year 2004 were reduced "due to heavy maintenance plan."

The sources said that the comparative figures of Combi (Boeing 747-200) availability for five months of 2001 and 2004 showed that during the current year, the availability of aircraft was only 70 per cent compared to nearly 98 per cent during 2001.

When asked if the number of freighters chartered by the airline increased significantly during 2004 and the national carrier utilized only 80 per cent of its Combi aircraft during the said period, the PIA management said: "The perception of under-utilization of serviceable Combi aircraft at 80 per cent is totally incorrect."

However, the management accepted that it had relied less on its own Combi aircraft and reintroduced freighter flights in June 2003 with additional input of the government through the Export Promotion Bureau.

The reason for the reduction in Combi's flying hours "due to heavy maintenance plan," as cited by PIA, has been questioned by the sources because the national carrier had taken the decision to hire foreign freighters well before 2004.

"Export Promotion Bureau supported PIA by cash subsidy of Rs45 million in 2003 for reintroduction of dedicated freighter flights in June 2003," PIA said.

Explaining the reason for hiring foreign freighters, PIA said: "The huge intakes from Europe are also being transported via London on PK's Combi flights as the freighter capacity is not enough to meet the high demand of European markets."

Well-placed sources in PIA said the flying hours of Combi were reduced by at least 956 hours during 2004.

"Flying hours per plane declined from 6194 hours in 2001 to 5206 hours in 2004 and when compared with the previous year, this amounts to a decrease of 956 hours," said the sources.

The sources said: "Average revenue per hour of Combi aircraft is approximately Rs 70,000 and a shortfall of 956 flying hours means a revenue loss of Rs 700 million."

In response to Dawn's questions PIA said: "The generation of flying hours is directly related with the availability of aircraft so without considering the same, comparison would not reflect a true picture."

It said: "To measure the average revenue of Combi aircraft or any other type of aircraft in isolation has no meaning as it is always measured by unit earnings and yield per RFTK on a sector/route."

In response to a question about how many freighters were chartered for cargo (out of Europe) during 2004, PIA said it operated a total of 90 flights during the year to cater to 8,000 tons on both ways "without compromising the use of available capacity on other available / in service aircraft."

PIA did not give a specific figure in its reply about the cost of chartering the freighters from Europe during 2004.

PIA said: "The cost of operation is much less than industry's average price. MNG Airlines is a highly reputed charter company in cargo industry which is having business with different reputed airlines in the world. The main feature of PK's contract with MNG is that the low price which was agreed in 2003 has been continued in 2004 and the same may be continued for the operation in 2005."

It said: "PK's correct evaluation and decision of chartering a 300 Freighter Aircraft from MNG was seconded in a way by the Swiss who leased the same type of aircraft from MNG and had started thrice-weekly operations on the Pakistan-Europe sector."

The airline also said: "It is 'believed' that PK's terms with MNG are still better than the others," said PIA.