ISLAMABAD, Aug 31: New Pakistan International Airlines’ Management has failed to stem the tide of massive losses being incurred by the national flag carrier, which posted a loss of Rs7.75 billion for the first half of the current year primarily because of increased financing cost of the newly inducted airplanes.

According to the financial results approved by the airline’s board at its 306th meeting, the losses suffered by the airline in the second quarter (April-June) were Rs3.8 billion, which were marginally less than the current year’s first quarter (January-March) when Rs3.95 billion loss was reported.

The new management led by Mr Zaffar Khan had taken over on April 9, at the beginning of the second quarter after former chairman Tariq Kirmani quit following a disastrous first quarter in which European Union slammed operating restrictions on most of the airline’s aircraft.

The losses during the first half of the year (Rs7.75 billion) were almost 26 per cent higher than the losses suffered during the same period last year (Rs6.14 billion), although the operating losses increased nominally by three per cent mainly because of 13 per cent decline in fuel bill. The four per cent increase in revenue was also too little to offset this huge deficit.

Therefore, the major difference came in the shape of increase in cost of financing of the newly acquired fleet of Boeing 777s and ATR-42s, which went up by a whooping 63 per cent.

PIA management says financing requirements of the corporation increased due to the additional financing required to sustain operations in view of increased accumulated losses and acquisition of new aircraft.

PIA chairman Zaffar Khan talking to Dawn said there was little he could do to cut the financing cost since the aircraft have been acquired and money borrowed.

However, he said, he had already initiated a number of steps from July 1 to further lower the operating costs and maximize revenue.

“It would take a little while before we can see the results of these measures,” he added.

These measures being implemented in July-December period include closing down of routes, reducing operating costs, enhancement of airfares and implementation of revenue management systems.

MARKET SHARE: During the first half of the current year, PIA share of the international market segment declined by to 46 per cent, whereas the share in domestic market remained stable at 69 per cent despite a drop of 4.4 per cent in the domestic passenger traffic.