The national carrier, Pakistan International Airlines (PIA), has claimed a surprise “profit” of Rs 13.1 billion in the first half of FY2025. But the truth, buried in a footnote of the government’s SOE report, exposes this number as an accounting gimmick rather than a business recovery.
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PIA’s so-called turnaround is entirely due to Deferred Tax Asset (DTA) recognition under IAS 12, a technical adjustment that has nothing to do with operational performance. In simple terms, PIA is recognizing imaginary future tax savings based on hypothetical profits, even though the airline remains neck-deep in debt, inefficiencies, and insolvency threats.
The CMU report minced no words, warning that this manipulated profit figure “impacts the quality of earnings” and misleads both the public and policymakers. PIA’s actual cash flow remains negative, and the company continues to depend on sovereign guarantees — Rs 269 billion to date — to stay afloat.
Even worse, this deceptive reporting shields PIA from urgent restructuring. While the airline’s operational model remains broken, losses mount, and liabilities grow, it is still dodging privatization — a process the government itself admits is the only viable path forward.
PIA has also received billions in indirect support, with Rs 7.7 billion collected in indirect taxes — while offering little in return to the exchequer. Meanwhile, its competitors operate profitably without taxpayer subsidies.
The bottom line: PIA’s profit is a fiction, crafted to buy time and avoid accountability. Every day that reform is delayed, the national carrier drags the public deeper into a financial black hole — while pretending to fly above it.
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