ISLAMABAD, Feb 23: The Pakistan International Airlines (PIA) on Wednesday informed the National Assembly's Standing Committee on Defence that despite the government's injection of Rs23.9 billion , the national carrier's profitability in 2004 was adversely affected by rise in global fuel prices.

The information was provided by PIA chairman to the National Assembly committee which met at the Parliament House under the chairmanship of the president of the ruling party Chaudhry Shujaat Hussain.

Documents presented before the committee show that the government paid Rs3.9 billion interest on Rs20 billion loans given to the airline by commercial banks during the last two years under the sovereign guarantee of the government.

The documents show that the total cash injection by the government amounted to Rs19.120 billion, Rs3.9 billion interest on loans and a cash equity of $150 million for fleet replacement.

Details on the utilisation of Rs20 billion submitted to the committee showed that PIA settled liabilities and dues of Rs14.3 billion from new loans obtained under the government guarantee.

According to the documents PIA had set itself a budgeted profit target of Rs4.3 billion for 2004 based upon on anticipated average fuel price of Rs51 per USG. However, due to exorbitant increase in the fuel price, which is now around Rs86/USG, PIA's fuel bill is expected to surpass budget by Rs5.3 billion in 2004."

The PIA chairman said that the open sky policy of the government posed a major threat to the organization. The documents presented to the committee show that foreign airlines increased their capacity to carry passengers by 29 per cent in 2004 thereby adversely affecting PIA's passenger revenue.

The foreign carriers airlifted 44 per cent passengers in 2004 while PIA's share was said to be 48 per cent. Another eight per cent passengers were carried by private airlines.

On the domestic front as well, the documents show three private airlines carried 142 per cent more passengers in 2004 as compared to the previous year. Meanwhile, a press release issued by the NA Secretariat said that the committee considered the Pakistan Navy (Amendment) Bill 2004 and issues relating to the PIA. The amendment bill propose strict penalty for corrupt officers. The bill was referred to the committee by the National Assembly.

Ministry of defence secretary informed the committee that the bill proposed to amend Sections 53,54,56,63,64 and 65 of the Pakistan Navy Ordinance, 1961s to bring it in conformity with service laws of other sister organizations.

The amendments envisage fines in addition to imprisonment in order to make good any loss caused to the state and also to serve as a deterrent for offences of criminal breach of trust. After thorough deliberations, the committee unanimously approved the draft bill which would be presented before the National Assembly.

Besides Chaudhry Shujaat, the meeting was attended by Minister of State for Defence Zahid Hamid and MNAs Hamid Nasir Chattha, Dr Noor Jehan Panezai, Sumaira Malik, Brig (retd) Zulfiqar Ahmad Dhillon, Lt-Col (retd) Ghulam Rasool Sahi, Haji Mohammad Ali Malkani, Engr Shahid Jamil Qureshi, Rana Omar Nazir Ahmad Khan, Engr. Amir Muqam, Nabil Ahmad Gabol, Hafiz Hussain Ahmad and Mohammad Pervaiz Malik.