ISLAMABAD, April 27: Pakistan International Airlines has posted Rs3.95 billion losses during the first quarter ending March 2007, despite stable fuel prices.

The airline had sustained a loss of Rs13.1 billion during 2006, while the loss during last year’s first quarter was Rs3.08 billion.

PIA management for the first time has acknowledged that the losses continue to mount despite the fact that fuel prices during this period remained below the 2006 level.

Previously, the management had been holding the high fuel prices as the main reason behind the losses and had even claimed that the airline could have posted a huge profit without the increase in fuel cost.

The factors being attributed to the Rs3.95 billion losses are hike in salaries of employees, increased cost of leased aircraft and higher maintenance cost of the fleet resulting in 19 per cent increase in operating expenses.

At the same time, 5pc growth in revenue because of 7.6 per cent increase in passenger revenue was partially offset by 10 per cent reduction in cargo revenue.

A statement issued by PIA said that the airline’s board which met on Friday expressed concern over the deteriorating financial situation.