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Funds Management

Internship Report On
Pakistan international Airlines PIA Finance Department

Funds Management

Submitted by:

NABILA RASHEED
BS(COM) Finance
Sindh University Jamshoro Hyderabad


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Funds Management

PAKISTAN INTERNATIONAL AIRLINE CORPORATION

Submitted by:

NABILA RASHEED
BS (COM) Finance
University Sindh Jamshoro Hyderabad

Submitted to:

PROF: DR NOOR MUHAMMAD ALI JAMALI

Director
Institute of commerce
UNIVERSITY OF SINDH JAMSHORO

Date of Submission: 15th Dec, 2010


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Acknowledgement

First of all, I m very thankful to Almighty Allah for providing me chance to


complete my internship at Pakistan International Airlines PIA, which is a Multi
National Corporation. I m also very thankful to my Parents and Teachers for
their kind support, encourage and prays.

I extend my great thanks and deep Appreciation to my supervisor MS: Afshan


Bhutto Senior Accounts Officer PIA. She was very kind, interesting, supportive
and encouraging person. This report will remain incomplete if I do not mention
the efforts and special attention of some respected persons, whose attitude and
affection encouraged me to do my internship properly and promptly at PIAC.
Among these respected persons Mr. Atif Ali, Assistant Manager, Mr. Javed
Jaffri, Senior Accounts Officer, Mr. Ather Hashmi, Senior Accounts Officer,
Mr. Abid, Senior Accounts Officer are included. Their special attention made
this difficult task very simple and enjoyable.

Nabila Rasheed


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DEDICATION

Dedicated

To

MY LOVING PARENTS

And

TEACHERS


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Table of Contents

COMPANY PROFILE 07

• History of PIA__________________________8
• Expension_____________________________ 14
• Vision, Mission, and Values_____________________15
• Board of Directors ____________________________17
• Management____________________________18
• Managing Director of PIA_________________19
• Corporate Social Responsibilities_________________19
• PIA’s Fleets___________________________________25
• PIA’s Personnel__________________________25
• livery __________________________________26
• PIA’s Network and Destinations _________________27
• PIA's Hub ____________________________________32
• Sports__________________________________32
• Hajj and Umrah Operations_______________ 34
• Flight Kitchen__________________________________36

FINANCE DEPARTMENT__________________ _____37

• Funds Management______________________40
• Finance & Bank_________________________41
• Dept Management_______________________________43
• Cach Management_______________________________45
• Bank Reconsiliation______________________48
• Payments,______________________________50
• Transfer of Surplus Funds________________________51

PROJECT

SUGGESTIONS__________________________________ ____52


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COMPANY
PROFILE


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HISTORY
Birth of a Nation, Birth of an Airline

Air transport has probably never been more important to the development of a new
nation than in the case of Pakistan. In June 1946, when Pakistan was still in the
offing, Mr. Mohammad Ali Jinnah, the Founder of the upcoming nation, instructed
Mr. M.A. Ispahani, a leading industrialist, to set up a national airline, on a priority
basis. With his singular vision and foresight, Mr. Jinnah realized that with the
formation of the two wings of Pakistan, separated by 1100 miles, a swift and efficient
mode of transport was imperative.

Orient Airways Takes to the Skies

On 23rd October 1946, a new airline was born. Initially registered as a pilot project in
Calcutta, Orient Airways Ltd. had at its helm Mr. M.A. Ispahani as Chairman and Air
Vice Marshal O.K. Carter as General Manager. The new carrier's base remained in
Calcutta and an operating license was obtained in May 1947.

Four Douglas DC-3s were purchased from Tempo of Texas in February 1947 and
operations commenced on 4th June 1947. The designated route for Orient Airways
was Calcutta-Akyab-Rangoon, which also happened to be the first post-war
international sector to be flown by an airline registered in India. Within two months of
Orient Airways' operational beginnings, Pakistan was born. The birth of a new nation
generated one of the largest transfers of population in the history of mankind.

Orient Airways, along with the help of BOAC aircraft which had been chartered by
the Government of Pakistan, started relief operations and transportation of people
between Delhi and Karachi, the two capitals. Subsequently, Orient Airways
transferred its base to Pakistan and established a vital link between Karachi and
Dacca, the two capitals of the two wings of Pakistan. With a skeleton fleet of just two
DC-3s, three crew members, and twelve mechanics, Orient Airways launched its
scheduled operations in a fairy-tale manner. The initial routes were Karachi-Lahore-
Peshawar, Karachi-Quetta-Lahore and Karachi-Delhi Calcutta-Dacca. By the end of
1949, Orient Airways had acquired 10 DC-3s and 3 Convair 240s which were
operated on these routes. In 1950, it had become increasingly apparent that additional
capacity would have to be inducted to cater to the growing needs of the sub-continent.

A New National Flag Carrier for Pakistan

Orient Airways was a privately owned company, with limited capital and resources. It
could not be expected to grow and expand independently. It was then that the
Government of Pakistan decided to form a state-owned airline and invited Orient
Airways to merge with it. The outcome of the merger was the birth of a new airline,
through PIAC Ordinance 1955 on January 10, 1955.


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In addition to transport activities, Orient Airways had established the nucleus of


overhaul and maintenance facilities and acquired trained pilots, engineers and
technicians, measures which proved to be a great asset for PIA during its teething
phase.

PIA’s First International Service

The year 1955 also marked the inauguration of the fledgling airline's first scheduled
international service - to the glittering, glitzy capital city of London, via Cairo and
Rome. Initially, there was much criticism, as the public could not comprehend or
justify the need to operate an international route when, in their opinion, other projects
vital for a developing country should have been given a higher priority. However,
PIA's focus was, and continues to be, to serve the Pakistani community at large. The
provision of transportation to expatriates has remained one of the foremost priorities
of the national airline. Moreover, PIA earned substantial foreign exchange through
international services, which it invested in the purchase of aircraft and spare parts, as
fleet expansion was a grave necessity for the airline.

New Planes, New


Directions,
New
Management

In 1956, orders were placed for two Super Constellations and five Viscounts which
were to be delivered in 1959. At this juncture, PIA possessed a small fleet which
comprised of Convairs, Viscounts, Super Constellations and DC-3s.


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While Mr. M.A. Ispahani was the first Chairman of the new dynamic airline; it was
the first Managing Director of PIA, Mr. Zafar-ul-Ahsan, who in his 4 year tenure, got
the ball truly rolling and set the shape of things to come. The PIA Head Office
building at Karachi Airport, which houses all the major departments of the airline,
was the brain-child of Mr. Zafar-ul- Ahsan. In fact, on his departure from the airline,
the employees presented him with a silver replica of the building with the caption,
"The House You Built".

In 1959, the Government of Pakistan appointed Air Commodore Nur Khan as the
Managing Director of PIA. With his visionary leadership, PIA 'took off' and within a
short span of 6 years, gained the stature and status of one of the world's frontline
carriers. In aviation circles, this period has often been referred to as the "golden years
of PIA".

Development, expansion, and growth were keywords that the new management was
committed to. In March 1960, PIA launched its first Boeing 707 jet service on the
London-Karachi-Dacca, route which later proved to be very successful. This trail-
blazing accomplishment resulted in PIA becoming the first Asian Airline to operate a
jet aircraft, setting trends for the future. In 1961, the airline took on the mammoth task
of initiating a cross-Atlantic service from Karachi to New York. By this time, PIA had
placed orders for more new aircraft, which included Fokker F-27s, Boeing 720Bs and
Sikorsky helicopters. Helicopter services in East Pakistan had gained momentum by
1962 and expanded to include Sylhet, Chittagong, Dacca, Comilla and Ishurdi. PIA's
helicopter services carried over 70,000 passengers during the first year of operation.
At the time, it was regarded as a stellar operation, equal to any other in the world.
Unfortunately, due to two mishaps, the service was discontinued in 1966.


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Historic Firsts and Unbroken Records

In 1962, finding the upper winds forecast favorable, PIA set out to break the record
for the fastest flight between London and Karachi. With representatives of FAI
(Federation Aeronautique International) on board to monitor the official timings, PIA
completed the flight in 6 hours, 43 minutes, 51 seconds, a record which remains
unbroken to this day.

In 1964, PIA achieved another historic first, regarded as a major milestones in the
chequered history of the airline. On 29th April, 1964, with a Boeing 720B, PIA
earned the distinction of becoming the first airline from a non-communist country to
fly into the People’s Republic of China. PIA's first service to China was from Karachi
to Shanghai via Canton. In 1964-65, PIA expanded its fleet further with the addition
of a fourth Boeing 720B and two Fokker F-27s. Serious development had become a
reality and the PIA team continued to move ahead with ambitious plans and goals for
the national flag carrier.

A collective pride and a joyous buoyancy was pervasive within the PIA family.
Riding high on the crest of success, PIA became a household name in Pakistan in the
mid sixties. The war between India and Pakistan, during 1965, further tested the
national airline. PIA played a major role in providing logistical support to the Armed
Forces by operating special flights using Boeings, Super Constellations, and
Viscounts. The Founder of the Nation, Mr. Jinnah had predicted that the Pakistan
Airforce would need the support of a civil airline in special circumstances, and this
came into evidence during the war.

In 1966, a system of feeder services linking eight new points in West Pakistan was
introduced. By this time, the airline's Viscounts were proving inadequate owing to
traffic growth, and had to be replaced by Tridents. The airline continued up the
growth curve, receiving two Fokker F-27s, two Boeing 707s and one Trident in the
following year.


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Style, Glamour, and Charisma

Around this time, the airline saw a change in the top slot. Air Vice Marshal, Asghar
Khan took over the reigns of PIA for a tenure of 3 years. A number of highpoints are
attributed to this period. The most colourful, if not the most significant, occurrence for
PIA was the introduction of a new air-hostesses' uniform designed by none other than
the renowned French designer, Pierre Cardin. Taking the aviation world by storm, this
move, more than any other single factor, imprinted PIA's name on the international
market. The uniforms were an instant hit, both at home and abroad.

Safety Management System at PIA

PIA is the first airline to get certified (initial certification) on Safety Management
System (SMS) by Civil Aviation Authority CAA - Pakistan. CAA Air Navigation
Order (ANO 91.0032 issued in September 2008) binds all airlines operating in
Pakistan to have SMS. Well before the issuance of this ANO, PIA initiated SMS
awareness and implementation in July 2008. PIA awarded initial certification on SMS
in 27th February 2009 by CAA.

The Pursuit of Excellence Through Technology and Quality Control

Not content with a number of historic firsts under its belt, PIA made history yet again,
by installing Pakistan's first computer, an IBM1401, in 1967. PIA's first Engine
Overhaul Shop, located near the Head Office building, was also completed and
commissioned around this time. The Ground Training School (GTS) now known as
the PIA Training Centre, was first conceived and developed during 1961-62.
Interestingly, training was initially imparted in the T-shaped building which has now
become the PIA Dispensary, close to the Head Office building.


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Ushering In a New Era of Growth and Development

PIA heralded the nineties by donning a bright new corporate identity. Old-timers may
remember the flutter that the earlier green and gold livery had created when it was
first introduced in 1974. However, in keeping with the changing times, PIA
introduced a smart, sporty 90's look. The familiar PIA green was reinforced with moss
green and pale blue stripes were incorporated into the new corporate identity. The
stripes, a universal symbol of sport, highlighted PIA's active participation and
sponsorship of a diverse range of national games. PIA's players have always been at
the forefront of Pakistani Cricket, Hockey, Squash, Football, Chess, Bridge, Polo and
Table-Tennis teams. The nineties also saw the expansion of PIA's massive Haj and
Umrah operations to Pakistan's smaller cities, in addition to the major cities of
Islamabad, Peshawar, Lahore, Quetta and Karachi.

PIA's growth continues unabated and the airline now operates globally, covering the
entire domestic landscape and international destinations spread over 4 continents.

Impressive statistics for a comparatively young airline? Since its inception in 1955,
PIA has indeed, come a long way.


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EXPANSION
In July 2002, PIA purchased six Boeing 747-300 aircraft from Cathay Pacific, five of
which were already on lease with PIA. The sixth arrived shortly after and PIA
operated it mainly on its North American and European routes. In October 2002, after
a period of ten years without any new order, the airline purchased eight Boeing 777
aircraft from The Boeing Company, including three 777-200ER (Extended Range),
two 777-200LR (Longer Range) and three 777-300ER versions. PIA was the launch
customer that revived the Boeing 777-200LR project that, until then, only had three
orders by EVA Air. The first two Boeing 777-200LR produced were test aircraft used
by Boeing, before they were delivered to PIA. One of these Boeing 777-200LR was
displayed at the Paris Airshow during 2005.

During 2004, PIA took delivery of its first Boeing 777-200ER aircraft in January. On
delivery of the first three Boeing 777-200ERs the airline introduced a new aircraft
livery, which was later applied to the majority of the fleet. PIA also acquired six half
life Airbus A310-300/ET from the Airbus management on a ten year lease agreement.
On 3 November 2005 PIA signed an agreement with the aircraft manufacturer, ATR
to purchase seven ATR42-500. The aircraft were purchased to replace the aging F-27
aircraft. The seven ATR aircraft were delivered between 2006 and 2007. On 6
December 2005, PIA leased an additional new Boeing 777-200ER from the
International Lease Finance Corporation (ILFC). The aircraft had the same
specifications as the previous Boeing 777-200ER that PIA operated. The aircraft was
delivered in January 2007 on ten year lease to the airline.

On 25 February 2006 Boeing delivered its first 777-200LR Worldliner to PIA, where
it flew from Everett to Islamabad via Manchester, England. PIA started non-stop
flights from Toronto to Karachi, Islamabad and Lahore from 3 March 2006 taking
advantage of Boeing 777-200LR's long range capability. PIA planned non-stop flights
to New York City and other US cities with sizable Pakistani population centres, but
was not given permission due to security reasons. On 31 May 2006, PIA took delivery
of its first ATR aircraft from Toulouse, France. On 23 December 2006, PIA took
delivery of its first Boeing 777-300ER. After the arrival of a second ATR 42–500,
PIA has ceased using military Lockheed C-130 Hercules for passenger services in the
north of Pakistan. The military planes were being used after the Fokker F27 fleet was
grounded due to a fatal crash in July 2006.


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A pair of Boeing 747s stored at Sialkot in 2008 during the EU restrictions. However,
once the ban was lifted the aircraft were back in use on all routes

On 5 March 2007, the European Commission, following an on-site visit[8][9], banned


all but eight planes of PIA's 44-plane fleet from flying to Europe citing safety
concerns. PIA was included in the List of air carriers banned in the European Union.
[10]
The remaining eight, namely the fleet of Boeing 777s, has been exempted from the
ban.[11] PIA claims that this is discriminatory and the bans are not justifiable [citation needed].
On 26 March 2007, Tariq Saeed Kirmani resigned after severe pressure from higher
authorities because of the EU ban[citation needed]. Zafar Khan was appointed as the new
chairman of Pakistan International Airlines. A team from the European Union visited
Karachi in July 2007, to check the condition of the planes and review the ban. On 5
July 2007, the EU lifted the restriction on 11 aircraft that PIA could fly into Europe,
of which five were Boeing 747-300s and six Airbus A310-300s.[12]. On 29 November
2007, The EU completely lifted the ban on PIA.[13]. In the same year, PIA signed a
lease deal for seven new Airbus A320-200 from Kuwait based leasing company
ALAFCO, the factory built aircraft were to be delivered between 2009 and 2010,
however the deal however was cancelled in 2008.

During April 2009, the management decided to launch a long-term ‘Business Plan of
PIA’ including purchase of new aircraft with details of the plan being finalised.[14]

VISION, MISSION AND VALUES


Vision

PIA's Vision is to be world-class airline meeting customer expectations through


excellent services, on time performance, innovative products and absolute safety.

Mission

Employee teams will contribute towards making PIA a Global Airline-of-choice


through:

• Offering quality customer services and innovative products

• Using state-of-the-art technologies

• Ensuring cost-effective measures in procurement and operations

• Developing Safety Culture.

Values


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Customer Expectations
Convenience, Care, and Affordability

Service
Personalized, Courteous, Passionate

Innovation
New Ideas, Products, Value Added Services.

Cohesiveness
Respect for Individuals, Teamwork, and Effective Communication

Integrity
Business Ethics, Accountability, and Transparency

Social Responsibility
Welfare, Health, Education.
Reliability
Loyalty and Consistency

Safety

Passengers, Employees, Environment,

BOARD OF DIRECTORS


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Ch. Ahmed Mukhtar


Minister for Defence and Chairman - PIA

Syed Naseer Ahmed

Malik Nazir Ahmed

Mr. Javed Akhtar

Lt. Gen (Retd) Syed Athar Ali


Federal Secretary Defence

Capt. Mohammad Aijaz Haroon


Managing Director – PIA

Prof. Mian Ijaz ul Hassan

Mr. Mubashir Iftikhar

Mr. Husain Lawai


Mr. Shaukat Ali Rana

Mr. Salman Siddique


Federal Secretary Finance

Mr Muhammad Shuaib
Secretary-PIA

MANAGEMENT


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Managing Director
Captain Mohammad Aijaz Haroon

Chief Financial Officer


Mr. Arif Majeed

Director - Corporate Planning


Mr. Shahnawaz Rehman

Director - Engineering and Maintenance


Mr. Maqsood Ahmed

Director - Finance
Muhammad Ziyad A Syed

Director - Flight Operations


Capt. Shuja Naqvi

Director - Information Technology


Mr. Shahid Sarwar

Director - Human Resource & Administration


Mr. Hanif Pathan

Director - Marketing
Mr. Salah uddin

Director - Precision Engineering Complex


AVM Muhammad Kamal Alam Siddiqui

Director - Procurement, Logistics and Food Services


Mr. Imran Ahmed Khan

Director - Training and Development


Mr. Dilawar Farid Baig

Director
Mr. S. Kamran Hasan

MANAGING DIRECTOR OF PIA


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Captain Mohammad Aijaz Haroon assumed the charge of Managing Director,


Pakistan International Airlines on May 7, 2008.

Captain Mohammad Aijaz Haroon has over thirty years of airline experience with vast
expertise in major operational areas of the airline. He joined PIA in the year 1977 as a
Cadet Pilot. He has served the national airline as Chief Pilot of F-27 aircraft besides
having over 16,000 hours of flying experience on different aircrafts and has been
flying the latest B-777 aircraft since 2004. He holds ICAO Airline Transport Pilots
license with Simulator / Flight Instructor Rating on all aircrafts in PIA and possess a
Simulator Instructor & DCP “A” Check Captain endorsement license for Boeing 777.

He has also held Senior Management positions in PIA including General Manager
Central Control, General Manager Airport Services and Director Airport Services.

Corporate Social Responsibility

Committed to Creating a Better World

PIA is driven by the highest standards of corporate governance and social


responsibility. As a public sector organization and a business leader, PIA believes in
building strong relationships with customers, partners, employees, and the
communities in which it operates. The organization's values are exemplified in a
range of corporate initiatives designed to impact positively on the lives of multiple
stakeholders. PIA practices active corporate citizenship through social services,
support for non-profit organizations, medical services for employees, the promotion
of sports, and educational initiatives.

PIA has institutionalized the practice of good governance by establishing a Corporate


Social Responsibility Committee. The Committee provides a platform to evaluate,
update, and recommend best practices as PIA continues on its mission to adhere to
business ethics and stamp out corruption. Corporate Social Responsibility (CSR) is
woven into the fabric of daily operations at PIA. Our employees wholeheartedly
contribute to our commitment to develop the organization, the communities in which
we function, and the country.


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Social Services

Boy Scouts Association

The PIA Boy Scouts Association (PIA-BSA), a provincial segment of the Pakistan
Boy Scouts Association, is based on the value system of the Scout Promise and Law.
The PBSA's mission is to actively train and develop members through Youth Training
Programs.

Scouting contributes to the education of young people and helps build a better world
where individuals can play constructive roles in society. The PIA-BSA's major
contributions include providing Haj services at domestic and Saudi Arabian airports,
engaging in activities with the Heritage Association of Pakistan, assisting special
children at PIA's Al-Shifa Trust, and participating in a number of health, cleanliness,
literacy, tree plantation, drug prevention, and blood donation drives. The PIA-BSA
has also started a cricket academy where thousands of youth have received cricket
coaching from PIA's renowned test and first-class cricketers. Following the
earthquake tragedy of 8th October, 2005, the PIA-BSA immediately deployed
contingents in Islamabad followed by scout deployments in Balakot, Garhi
Habibullah, Muzaffarabad, and Bagh where relief goods were distributed and
emergency services were rendered.

PIA Planetariums
Through a combination of projectors, optics, electronics, and precision engineering,
PIA offers a range of cosmic experiences to the Pakistani people. The PIA
Planetariums enable the viewing of virtual universes, replete with stars, planets, and
nebulae and visitors throng the planetariums to look at astronomical phenomena such
as eclipses, alien landscapes, planets, and the sun. PIA is the only airline in the world
to have invested in an innovative and educational planetarium project that is open to
the general public at affordable rates.

PIA Horticulture
Plants and trees provide habitat, shelter, food, materials and medicines to human
beings and animals. Realizing the significance of a healthy and pollution-free
environment, PIA set up a horticulture division in 1996. In addition to maintaining
indoor and outdoor plants and trees, PIA Horticulture provides seasonal flowers for
display in PIA's offices and for a range of events, winning several awards and
accolades at flower exhibitions across the country. To reduce pollution and contribute
towards a greener Pakistan, PIA Horticulture actively participates in tree plantation
campaigns during each spring and monsoon season.


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Support for Non-Profit Organizations

As part of its corporate social responsibility initiatives, PIA supports a number of


charities and trusts:

• Al-Shifa Trust provides relief and rehabilitation services to special children


suffering from cerebral palsy and other motor disorders.

• Zindagi Trust provides education to underprivileged and working children.

• The Citizens Foundation runs a professionally managed network of purpose-


built schools in the poorest rural areas and most neglected urban slums of
Pakistan

• CHAL is a network of non-profit organizations and individuals dedicated to


providing rehabilitating services to disabled persons.

• SIUT (Sind Institute of Urology and Transplantation) provides medical


services to the patients suffering from Urology, Nephrology, Transplantation
and Liver Diseases.

Training and Education

PIA Training Center


The PIA Training Center is a leading airline training institution that delivers the
highest standards of aviation instruction. The Training Center is built around a highly
advanced training infrastructure, approved by local and international regulatory
authorities such as CAA, ICAO, and IATA. The PIA Training Center's courses are
based on a unique, standards-based curriculum designed to impart knowledge and best
practices in all the aspects of the airline industry. The PIA Training Center provides
quality training to PIA's pilots, engineers, air hostesses, and to employees of other
associated PIA divisions.

PIA Model Secondary School


The PIA Model Secondary School was set up in 1980 to provide high quality
education to the children of PIA's employees at an affordable fee. Situated at a
distance from the hubbub of the city, the school is housed in a modern building that


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spans over 10 acres of land and is staffed by teachers dedicated to empowering


children with knowledge and skills for the future. Equal emphasis is placed on
curricular and extra curricular activities in order to produce well-rounded, holistic,
and responsible citizens.

PIA Industrial Training Institute


The PIA Industrial Training Institute was established in 1986 to provide technical,
vocational, and industrial knowledge to the families of PIA's employees. With the
sustained support of top-level management at PIA, the Institute has functioned
smoothly for over two decades, and has emerged as a leading industrial training center
in the region. The Institute imparts industry knowledge, and specialized training
courses in arts and crafts to the families of employees for a very nominal fee,
empowering them to earn livelihoods and gain respect in their communities.

Medical Services

PIA Employee Health and Medical Services


The health and welfare of our employees has always been a matter of utmost
importance and significance at PIA. All employees are provided with a
comprehensive medical package, in collaboration with reputable hospitals, diagnostic
labs, and medical institutions. In 1959, PIA established a Medical Division to supply
wide-ranging medical coverage to active and retired employees. To ensure that the
highest standards of aviation are maintained, a Crew Center periodically carries out
air crew checks, in conformity with international and Civil Aviation Authority
standards.

PIA's medical facilities cover the parents and spouses of serving employees, children
up to the age of 27, unmarried daughters, and disabled, mentally challenged children
of any age. Retired employees and their spouses are also eligible for medical care at
PIA's Medical Centers. In addition to coverage in Pakistan's major cities, PIA has
extended its medical network to 35 smaller stations, in collaboration with private and
public sector hospitals. PIA also looks after its overseas employees under the Local
National Health Scheme and Insurance Schemes.

PIA Sports Division


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In continuation of its unwavering commitment to Pakistan's development, the PIA


Sports Division was set up in 1958. PIA's contribution to the advancement of
Pakistani sports remains unparalleled - no other organization in the country has
consistently invested in the promotion and development of sports.

Visionary leadership at PIA provided the impetus for the airline to set up a unique
career development plan for sportsmen. PIA provides attractive and stable jobs to
outstanding sportsmen, empowering them to focus on what they do best. Sportsmen
are provided gear, travel facilities, and benefits that have enabled them to excel and
make Pakistan proud. PIA's sportsmen have been and continue to form Pakistan's
lineup for major sports including cricket, hockey, football, squash, polo, tennis,
bridge, chess, table tennis, cycling, and body building. PIA has dramatized the world
of Pakistani sports by transforming popular games into national sports, national
sportsmen into international heroes, and national tournaments into international sports
bonanzas.

Safety

Corporate Safety & Quality Assurance

The PIA Corporate Safety & Quality Assurance Division ensures safe operations by
adopting international standards and recommended industry practices. Strict
adherence to Safety & HSEQ policy and procedures during flight as well as on ground
helps in maintaining a hazard free workplace environment. Corporate Safety & QA
Division is responsible for effective implementation of Safety Management System
(SMS), Health Safety & Environment (HSE) Program, Flight & Ground Safety
Management, Flight Data Monitoring & Analysis Program, Emergency Response
Planning (ERP) and Fire Protection Services as well as Quality Assurance Program
encompassing overall operations of the airline.

IOSA (IATA Operational Safety Audit) Certification

PIA is proudly maintaining its IOSA Certification and thus IATA Registration since
2005. The IATA Operational Safety Audit Programme is an internationally
recognized and accepted system for assessing the operational management and control
systems of an airline.

IOSA is based on industry proven quality audit principles and structured to ensure a
standardized audit with consistent results. Airlines that meet all standards become
registered with IATA as an IOSA Operator. IOSA Audit covers Organization and
Management System, Flight Operations, Operational Control & Flight Dispatch,


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Aircraft Engineering & Maintenance, Cabin and Cargo Compartment Operations,


Aircraft Ground Handling, Cargo Operations and Operational Security of the airline.

By virtue of PIAs IOSA Certification, PIA is able to ensure safety of passengers as


well as employees.

Fire Safety-in the Workplace and at Home


PIA has made a number of arrangements to handle incidental fires and allied hazards.
First Aid Fire Stations have been set up in Karachi, Lahore and Islamabad, and Fixed
Fire Protection Systems have been installed at sensitive premises. PIA's locations are
equipped with portable fire extinguishers and a range of other fire safety devices. All
the installed equipment is inspected regularly and maintained in accordance with
international standards.

Fire Safety Courses are conducted regularly to equip employees with fire fighting
skills and to impart critical knowledge of preventive measures. Fire Prevention
Courses are also conducted at the Staff Township and PIA Model Schools so that
employees and their families can take appropriate fire prevention measures at home.

PIA's Corporate Safety & QA Division also actively engages in advocacy sessions to
create awareness through print publications and sharing of experiences. Working in
collaboration with the Fire Protection Association of Pakistan, PIA is committed to
creating and promoting a culture of safety at a nation-wide level. The division's future
plans include running fortnightly fire and safety awareness sessions at government
and private schools.

Emergency Response Planning


Passenger care is an airline's most crucial responsibility. Acknowledging the
significance of Emergency Response Planning (ERP), PIA has set up a discrete
section to handle emergencies. The Emergency Response Planning Section has
developed an Emergency Response Manual and manages Emergency Response
Center Teams, Field Teams, Family Assistance and Support Teams, and Volunteers.
The ERP Section will also train volunteers in the areas of aircraft emergencies,
rescue, basic first aid, and fire fighting to effectively respond to natural disasters.

Emergency Response Facilities include the computerized data storage of teams and
volunteers with an automated emergency call out system. The software application
also provides a technology supported callback system for contacting families of the
affected.


24
Funds Management

PIA’s Emergency Response Planning Section hopes to contribute meaningfully


towards national capacity building in the area of emergency management, through
financial and human resource investments.

PIA's Fleet

The Pakistan International Airlines fleet includes the following aircraft (at 11 April
2010)

Pakistan International Airlines Fleet


Passengers
Aircraft Total
(Economy Plus/Economy)
184(0/184)
Airbus A310-308/324 12 205(20/185)
207(20/187)
ATR 42-500 7 50(0/50)
Boeing 737-340 6 118(0/118)
Boeing 747-240BM(Combi) 2 468(100/368)
Boeing 747-270C/21AC 2 Cargo
Boeing 747-367 5 468(100/368)
Boeing 747-412 2 447(100/347)
Boeing 777-240ER/252ER 3 284(20/264)
Boeing 777-240LR 2 271(20/251)
Boeing 777-340ER 3 308(20/288)
Total 50

Fleet developments

• The airline is expected to order a mix of Boeing 737-800 or Airbus A320/Airbus


A321 to replace the 25+ years old 6 Boeing 737-300. According to PIA Chairman
Captain Aijaz, "The airline plans to acquire up to 27 aircraft, through a mix of


25
Funds Management

orders and leases. We'll place nine firm orders with nine purchase rights, and take
nine from leasing companies. Deliveries will start at the end of 2010."
• PIA will also be upgrading their entire Airbus A310-300 fleet to increase their
utilization.

Livery

In December 2003 PIA introduced a new image that was applied to their first 777-
200ER and on two leased A310-300s one of which was in service. The livery was
white at the front and beige at the rear separated by a dark green stripe. The tail was
painted white with PIA written in dark green. PAKISTAN was added to the front
fuselage and the engines where painted beige. The PIA written in calligraphic Urdu
was added just behind the cockpit.

However, due to criticism the design was modified before the first Boeing 777 was
delivered. PIA and Boeing replaced the tail with a flowing Pakistan flag on a beige
background. PAKISTAN titles were removed and the PIA acronym was enlarged and
moved onto the fuselage. The engines and Urdu PIA remained the same. The leased
A310s and most of PIA fleet also adopted this livery at a later date.

In early 2006 the airline launched four new tail designs for its fleet. The tails
represented the four provinces of Pakistan: Sindh, Punjab, Khyber Pakhtoonkhwa and
Balochistan.[28]. The tails promoted the cultures of the four provinces of Pakistan by
applying motifs to the tails and adding a city name to the rear of the fuselage
corresponding to the province. The "Frontier" tail represented the "Phulkari"
(flowering) pattern that reflected a tradition of embroidery generally done on shawls,
shirts and linen. The "Punjab" tail was loosely related to the tile decoration of the
Wazir Khan Mosque in Lahore. The "Balochistan" tail showed the creativity seen in
the kilims, carpets and rugs woven with wool, goat or camel hair and mixed yarn. The
pattern is mostly bold geometric motifs in primary colours dominated by red. The
"Sindh" tail was influenced from the Hala tile work with electric blue and white floral
patterns. In 2008 management stopped the application of provincial tails deeming
them too costly.

PIA launched their new livery in early April 2010. An Airbus A310, Boeing 777-200
and Boeing 747-300 were the first aircraft to wear the new look. The livery was
unveiled at the PIA headquarters on a Boeing 777 model. [29] The livery is loosely
based on the hugely popular 1980s "Sohni Dharti" livery and is expected to be painted
on all of the active fleet when they are put into routine maintenance.[30]

The livery consists of a Green and Gold strip running around the bottom of the
fuselage and continuing right up until the tail cone. The forward/upper portion is
white and at the rear it is an off white/beige colour. The bottom part of the tail blends
into the upper fuselage as it is too white with the rest of the tail painted with a large
wavy Pakistan flag which takes up the whole tail in a dark green colour. At the front
of the fuselage 'PIA' is written in a billboard style in dark green and underneath
'Pakistan International' is written in gold. Just behind the cockpit there is a stylised


26
Funds Management

Urdu PIA logo as well as on the engines. Underneath 'Pakistan' is written in bold on
the aircraft belly.

PIA Personnel

Personnel December 2008

Captains/Pilots/Co-Pilots 531

Aircraft Engineers 884

Flight Engineers 44

Airhostess 918

Flight Stewards 1195

Others 14432

Total Number Of Employees: 18004

PIA’s Network

Connecting the World


PIA’s vast network spans the globe, covering all the major cities of Pakistan and a
host of international destinations.

International Destinations:

United Kingdom
• Birmingham
• Glassgow
• Leeds (Bradford)
• London
• Manchester

Pearl
• Bangkok
• Hong Kong


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Funds Management

Regional
• Delhi
• Dhaka
• Kathmandu
• Mumbai
• Kabul
Gulf/M.E
• Abu Dhabi
• Al-Ain
• Bahrain
• Doha
• Dubai
• Kuwait
• Muscat
• Sharjah
Europe
• Amsterdam
• Copenhagen
• Istanbul
• Milan
• Moscow
• Oslo
• Paris
Batik
• Kuala Lumpur
Code Shared
• Kiev (Europe)
• Urumqi (China)
Saudi Arabia
• Dammam
• Jeddah
• Riyadh
North America
• New York
• Toronto
China/Japan
• Beijing
• Tokyo

Total Destinations: 37


28
Funds Management

International Network

Domestic Destinations:

Sindh
 Karachi
 Moen-jo-Daro


29
Funds Management

 Sukkur
 Benazeerabad (Nawabshah)
 Hyderabad
Balouchistan
 Dalbadin
 Panjgur
 Turbat
 Quetta
 Gawadar
Federal Capital and Punjab
 Islamabad
 Bahawalpur
 Dera Ghazi Khan
 Faisalabad
 Lahore
 Multan
 Rahim Yar Khan
 Sialkot

N.W.F.P
 Peshawar
 Dera Ismail Khan
Northern Areas
 Chitral
 Gilgit
 Skardu

Total Destinations: 23


30
Funds Management

Domestic Network


31
Funds Management

PIA's Hub
The Civil Aviation Authority of Pakistan (CAA), a beacon of service and
achievement, has witnessed dynamic growth since its inception in 1982. Over the
years, the CAA has remained committed to promoting air transportation and
navigation by providing services to civil airports and aerodromes in Pakistan.

Today, the CAA manages the operations and maintenance of several airports and
associated facilities across the country. The CAA specializes in planning, installation,
maintenance, operations, and calibration services for aircraft that use the nation's
airspace.

With a vision for the future, the Civil Aviation Authority envisaged a contemporary,
modern passenger terminal at Quaid-e-Azam International Airport, Karachi, to
effectively handle growing air transport requirements.

Jinnah Terminal - Karachi

Karachi - a bustling, cosmopolitan metropolis - is home to Pakistan's rich cultural,


social and economic heritage. The vibrant city draws visitors from all over the world
and is a hub of tourism and business.

Whether you are arriving, departing, or in transit, you are sure to enjoy your stay at
the Jinnah Terminal at Quaid-e-Azam International Airport in Karachi. Designed to
facilitate the modern traveler, the Jinnah Terminal is a perfect blend of form and
function.

From duty-free shopping to delicious local and international cuisine, you'll find plenty
to do at the Jinnah Terminal. Airport lounges, equipped with the latest entertainment
and Internet facilities, will help you relax if you have time on your hands. If you are
rushing to catch another flight, the high-speed lifts and escalators will get you there
with time to spare. Passenger facilitation services, ranging from courteous porters to
spacious check-in halls, eliminate the stress of travel.

PIA's hub in Karachi is the gateway to Pakistan. Come and experience our unique
hospitality and traditions.


32
Funds Management

Sports

Nurturing Talent, Achieving Glory

PIA is much more than a national airline, it is a national institution. In continuation of


its unwavering commitment to Pakistan's development, the PIA Sports Division was
set up in 1958. PIA's contribution to the advancement of Pakistani sports remains
unparalleled - no other organization in the country has consistently invested in the
promotion and development of sports.

Visionary leadership at PIA provided the impetus for the airline to set up a unique
career development plan for sportsmen. PIA provides attractive and stable jobs to
outstanding sportsmen, empowering them to focus on what they do best. Sportsmen
are provided gear, travel facilities, and benefits that have enabled them to excel and
make Pakistan proud. PIA's sportsmen have been and continue to form Pakistan's
lineup for major sports including cricket, hockey, football, squash, polo, tennis,
bridge, chess, table tennis, cycling, and body building.

PIA has dramatized the world of Pakistani sports by transforming popular games into
national sports, national sportsmen into international heroes, and national tournaments
into international sports bonanzas.

Achievements and recognitions

PIA were the first Asian airline to receive the Boeing 737–300

• First airline in the world to operate scheduled helicopter services.[citation needed]


• First airline in the world to take delivery of the Boeing 777-200LR Worldliner
(Longer Range Variant).
• First airline in Pakistan to operate a flight with an all female crew at command
and in the cabin.
• One of PIA's aircraft hold the record for the longest commercial jet flight in
aviation history.
• First airline in the world to operate the Boeing 777-200ER, 777-200LR and
777-300ER altogether – all the three variants available on the market at the
time.
• First airline to take delivery of the Boeing 777-200 Longer Range Variant.
• PIA was given three awards in 2008: The "Brands of the Year" Award,
"Consumers Choice Award" and "One The Best Airlines Award (Cargo)".


33
Funds Management

• PIA was awarded a shield by Presidency of Civil Aviation in Saudi Arabia in


recognition of distinguished Passenger Services compared to other airlines
conducting Hajj operations 2009–2010 at Jeddah Airpor

Haj and Umrah Operations


PIA, Pakistan's national airline, operates an extensive two-month Haj operation each
year, to and from Jeddah, Saudi Arabia.

Haj, the holy pilgrimage undertaken by Muslims from around the world in the twelfth
month of the Islamic calendar (Zilhaj), is one of the fundamental pillars of Islam.
Muslims endowed with good health and the economic means to undertake the
pilgrimage, perform this sacred duty at least once in their life time. Haj is the largest
congregation of the faithful in recorded history. Over the last 1400 years, Muslims
from across the world, assemble in the House of Allah in Makkah, Saudi Arabia.

PIA, Pakistan's premier airline, transports thousands of pilgrims each year, from
several Pakistani cities to the Kingdom of Saudi Arabia, at special rates.

Every year, PIA also schedules special flights on the Pakistan- Jeddah-Pakistan sector
to serve pilgrims on their way to Saudi Arabia to perform Umrah.

Pakistan International Airlines (PIA) Flight Schedule,


Flight Status, Airfare Booking, Information, Offices,
And Other Flight Enquiry
Check flight schedule, flight status directly from Pakistan International
Airlines official website. You can also check on the cheapest airfare,
flight schedule, flight status, airlines offices, contact number, airlines
packages, air cargo partners, air ticket prices and booking procedure,
international airfares, frequent flyer and other flight information and
travel deals and packages. When you are making an airfare booking,
select from either economy airfares, business class airfares or first class
airfares whichever you prefer. Have a pleasant flight journey and enjoy
your holidays or business trip!

Pakistan International Airlines (PIA) Flights To Airports In


Pakistan, Asia and Worldwide
Kabul (Kabul Beijing (Beijing Capital Hong Kong (Hong
International Airport) International Airport) Kong International


34
Funds Management

Airport)
Tokyo (Narita Delhi (Indira Gandhi
Dhaka (Zia International Airport)
International Airport) International Airport)
Mumbai (Chatrapati
Kathmandu (Tribhuvan Dalbandin (Dalbandin
Shivaji International
International Airport) Airport)
Airport)
Gwadar (Gwadar Quetta (Quetta
Panjgur (Panjgur Airport)
International Airport) International Airport)
Turbat (Turbat Islamabad/Rawalpindi (Benazir
Gilgit (Gilgit Airport)
International Airport) Bhutto International Airport) Hub
Skardu (Skardu Dera Ismail Khan (Dera
Chitral (Chitral Airport)
Airport) Ismail Khan Airport)
Peshawar (Peshawar Dera Ghazi Khan (Dera
Bahawalpur (Bahawalpur Airport)
International Airport) Ghazi Khan Airport)
Faisalabad (Faisalabad Lahore (Allama Iqbal Multan (Multan
International Airport) International Airport) Hub International Airport)
Rahim Yar Khan
Sialkot (Sialkot International Hyderabad (Hyderabad
(Shaikh Zayed
Airport) Airport)
International Airport)
Karachi (Jinnah
Moenjodaro (Moenjodaro Nawabshah (Nawabshah
International Airport)
Airport) Airport)
Hub
Bangkok
Sukkur (Sukkur Kuala Lumpur (Kuala Lumpur
(Suvarnabhumi
Airport) International Airport)
International Airport)

Manama (Bahrain Kuwait City (Kuwait Muscat (Seeb


International Airport) International Airport) International Airport)
Doha (Doha Dammam (King Fahd Jeddah (King Abdulaziz
International Airport) International Airport) International Airport)
Riyadh (King Khalid Abu Dhabi (Abu Dhabi Al Ain (Al Ain
International Airport) International Airport) International Airport)
Dubai (Dubai Sharjah (Sharjah International Copenhagen
International Airport) Airport) (Copenhagen Airport)
Paris (Charles de
Milan (Malpensa
Gaulle International Dublin (Dublin Airport)
International Airport)
Airport)
Amsterdam
Moscow (Sheremetyevo
(Amsterdam Airport Oslo (Gardermoen Airport)
Airport)
Schiphol)
Birmingham
Barcelona (Barcelona Istanbul (Atatürk International
(Birmingham
International Airport) Airport)
International Airport)
Glasgow (Glasgow Leeds/Bradford (Leeds Bradford London (London


35
Funds Management

Airport) International Airport) Heathrow Airport)

Flight Kitchens

PIA runs two modern, well-equipped Flight Kitchens in Karachi and Islamabad that
serve culinary delights ranging from delicious Pakistani delicacies to tempting
Western cuisines to more than 15,000 passengers everyday, traveling on domestic and
international flights. In addition to serving sumptuous food, PIA Flight Kitchens also
cater to VVIP flights and Chartered flights for top government officials and foreign
delegates. Special meals which are customized according to the passengers’
requirements like Diabetic Meal, Vegetarian Meal, Low Cholesterol Meal and Baby
Meals are also offered to our passengers upon request.

The kitchens are supported by strong production and operation teams including
expatriate chefs who have a diverse experience in international cuisines. The chefs
have undergone overseas training to further hone their skills. Several of PIA’s top
chefs have also been posted to overseas flight kitchens to share their expertise in
cooking skills .

Infact, since February 2006, the management control of the Karachi Flight Kitchen
has been given to Singapore Air Terminal Services (SATS), a leading premier
company in ground and cargo operations , and inflight catering, to further enhance the
quality of food on board the flights. Accordingly, SATS has initiated an extensive
renovation of the Karachi Flight Kitchen to upgrade its infrastructure and are
establishing extremely stringent quality control standards that shall ensure the highest
quality and hygiene levels. PIA flight kitchen is HACCP Certified which is an
international certificate on food hygiene.

The two Flight Kitchens are also equipped with food testing microbiological
laboratories which conduct stringent daily microbiological tests to ensure that food
produced is safe, nutritious and palatable. All the other related processes like
Inventory Control, Menu Planning, Portion Control, Cost Calculations, and
Management Information Systems are managed through cutting-edge technology and
modern business practices


36
Funds Management

FINANCE DEPARTMENT
The Finance Department at Pakistan International Airlines Corporation (PIAC)
is headed by the Director Finance (DF). The Finance Department has been
divided into four divisions with each division headed by a General Manager
(GM). The divisions are:

1. General Accounting
2. Revenue Accounting
3. Funds Management
4. Budgeting & Costing


37
Funds Management

FUNDS
MANAGEMENT

SECTION

OF

PIA


38
Funds Management

ORGANIZATIONAL

CHART
OF

FUNDS
MANAGEMENT
SECTION


39
Funds Management


40
Funds Management

Finance and bank relashionship

Objectives
Establishing and maintaining business relations with the banks.

Dealing and negotiation with the bankers.

Short term funds’ placement to earn interest/profit.

Establishing and modifying banking arrangements at local and foreign stations of


PIA network.

Arrangement of bank guarantees.


Issuance of monthly exchange rates to the whole PIA network.

Management reporting.

BANKERS

1. AL Rajhi 11.Citi Bank


Bank
12.Commerz
2. ABN Amro Bank

3. ANZ 13.Comerica
Bank
4. Askari
Commercial 14.Commercial
Bank Bank of
Kuwait
5. Banco De
Roma 15.Deutsche
Bank
6. Bank of
Austria 16.Danske Bank

7. Bank of 17.Faysal Bank


American
18.HBL
8. Bank of China
19.HSBC
9. Bank Islami
20.Himalayan
10.Barclays Bank Bank Ltd


41
Funds Management

21.Handles 29.National
Banken Westminster
Bank
22.Habib
American 30.Royal Bank of
Bank Canada

23.J.P Morgan 31.Standard


Chase Bank Chartered

24.KASB Bank 32.Samba

25.LA CAIXA 33.Spare Banken

26.National Bank 34.Sabadell


of Pakistan Atlantico

27.National Bank 35. Sumitimo


of Oman Bank 36.
UBL
28.National Bank
of Kuwait

Bank Accounts at Stations (Foreign & Domestic)

There are three types of bank accounts, being operated by


PIA station’s network:

1. Collection Account (Station’s A/C)

All cash receipts of the station are deposited into


this bank account. For the purpose of payments at station,
the amount paid through disbursement account is
recouped from this account. The remaining balance is
transferred to the respective composited bank account of
Head Office.

2. Disbursement Account (Station’s A/C)

It is nil/minimum balance bank account


from which payments of PIA station are made and
the paid funds are regularly recouped from the
collection account.

3. Composite Account (Head Office A/C)


42
Funds Management

All surplus funds from the stations (Domestic/Foreign)


are remitted to these bank accounts, which are operated
centrally by Head Office (HO). All HO based payments
are made through these bank accounts.

IT SYSTEM

COSAP - Used at Funds Management Section


for loan management and recording of Misc.
receipts.

D-Base – Used at Funds Management Section to


prepare monthly JV.

DEBT MANAGEMENT

 Funding arrangement for working capital and


other financing requirement.

 Roll over (Renewal) of expired/matured loans and


facilities.

 Managing debts and ensuring debt service


obligations.

 Management reporting.

a. Non Fleet Loans


Habib Bank Limited

Citibank NA

HSBC

National Bank of Pakistan

Barclays

Askari Commercial Bank

Standard Chartered Bank


43
Funds Management

Bank Islami Pakistan

Faysal Bank Limited

Arif Habib Bank

United Bank Limited

b.Fleet Loans
Citibank NA

RBS

Fleet Loans
These loans are denominated in USD.
They are all Govt. of Pakistan (GoP)
guaranteed loans.

Non Fleet Loans


These loans may be divided into two
classes:

1) GoP guaranteed loans

2) Non-GoP guaranteed loans (Loans against


PIA assets)

Both of the above type of loans are


denominated in both PKR and foreign
currency.

Debt Burden on PIA


 PIA suffered huge losses from operations
during last 5 years and is expected to
follow the same pattern in year 2009. The
huge loss is mainly attributable to hike in
jet fuel prices and adverse PKR/USD
exchange parity.

Year wise status of the loss is as follows:

Year Loss for the Period


Total Equity of PIA

44
Funds Management

(Rs. in Billion)
(Rs. in Billion)

2005 4.40
10.45

2006 12.76
(0.79)

2007 13.40
(11.90)

2008 35.88
(46.70)

2009 10.77 (Upto Sep. 09)


(55.62)

 All of those constraints compelled PIA to


obtain loans to meet its working capital
requirements, roll over of matured loans
and rescheduling of short term loans into
long term arrangements.

 Due to these factors, financial health of


PIA deteriorated over the years and finally
resulted in negative equity which was
reported to be Rs. 55.6 billion, as at Sep.
30, 2009.

Procedure for Obtaining Fleet/Non Fleet Loans

 A Request for Proposal (RFP) is floated to


different banks, for submission of their
offer to PIA.

 Interested banks submit Offer Letter to


PIA.


45
Funds Management

 The offers are analyzed and evaluated by


PIA management and negotiation is
undertaken with the offering banks.

 The most suitable offer is selected by PIA


management and forwarded to Ministry of
Finance (MoF) for final approval.

 After approval of MoF, PIA grants Award


of Mandate to the finally approved bank
by MoF, for completion of documentation
and other allied matters.

 After final documentation, the


loan/financing is disbursed to PIA.

CASH MANAGEMENT

Objective
 Monitoring of daily bank balance and cash
flow forecast.
 Placement and management of surplus
funds to achieve maximum return/minimize
interest cost.
 Short term funds’ placement to earn
interest/markup.
 Establishing and modifying banking
arrangements at local and foreign stations of
PIA network.
 Efficient utilization of local and foreign
currency’s running finance facilities.
 Timely undertaking of foreign currency
receipts/payments.
 Arrangement of cash dollars for TA/DA
payment to PIA staff, being posted abroad.
 Issuance of monthly exchange rates to the
whole PIA network.
 Short term funds’ placement to earn
interest/profit.


46
Funds Management

Mechanism
Structure

The cash management structure comprises of 3


types of bank accounts namely:

1. Collection A/C (Domestic and international


Station)
2. Disbursement A/C (Domestic and
international Station)
3. Composite A/C (Head Office – PKR & Non-
PKR)

The collection and disbursement bank accounts at


stations have been discussed in detail in the first
section. The no. of these bank accounts is given
below:

International bank accounts (Collection &


disbursement) are spread over 35 countries,
maintained with 31 different banks and deal in 30
different currencies.
Domestic bank accounts (Collection &
disbursement) are maintained with 5 different
commercial banks in Pakistan.

The head office composite accounts, along with the


associated running finance facilities, are of two
types:

International Foreign Currency (FCY) Composite


Accounts:

1. Habib Allied International Bank London Euro


A/C

All Euro based countries (Except UK) remit


their excess funds on a weekly basis, to this
account. All head office Euro denominated
payments are made through this account.


47
Funds Management

2. Habib Allied International Bank London USD


A/C

All head office foreign currency payments


(Except USD and Euro) are made through
this account. For this purpose, funds are
frequently transferred from Citibank New
York USD A/C and HAIB London Euro A/C.

3. Citibank New York USD A/C

All international stations (Excluding Euro


zone countries but including UK) convert
their surplus local currency into USD and
remit the funds to this bank account. All USA
based stations also remit their surpluses to
this composite account. Head office USD
based payments are made through this bank
account.

Domestic (PKR) Composite Accounts:

1. Habib Bank Limited Karachi

PIA maintains two main bank accounts at


HBL Karachi Airport Branch namely:

A. HBL - 1718
This bank account deals with all the
collection and disbursement accounts at
domestic stations, maintained with Habib
Bank Limited. At each day end, all the
closing balances held at respective
domestic collection accounts are
automatically transferred to this
composite account. If there is shortage of
funds for payment, at any domestic
station and the funds held at the
respective collection account are
insufficient to meet the payment
requirement, the short funds can be
recouped from this account. The closing
balance available at day end is


48
Funds Management

transferred to the other bank account at


HBL having A/C No. CD-5.

B. HBL – CD 5
All the surplus funds are transferred in
this account at day end from HBL -1718
account. In addition to that, all the funds
credited in the respective collection
accounts of the departments at head
office are automatically transferred to this
account. In the same way, whenever the
any payment is to be made from any
departmental disbursement account, the
funds are recovered from this bank
account. This bank account is used for all
the head office PKR denominated
payments. The transactions of following
head office departments are executed
through this bank account:

 Medical
 Engineering
 Flight operation
 Finance
 Marketing
 Precision engineering
 Stores and purchases
 Ramp services
 Speed Ex.

2. United Bank Limited Karachi

In this bank account, the surplus funds from


Lahore & Karachi stations including KBO are
remitted on daily basis. Operation
mechanism for this bank account, for the
purpose of remittance and short funds, is
same as discussed above for Habib Bank.

3. National Bank of Pakistan Karachi

In this bank account, the surplus funds from


major domestic stations like Multan,
Faisalabad and Sialkot are remitted on daily
basis. Operation mechanism for this bank
account, for the purpose of remittance and


49
Funds Management

short funds, is same as discussed above for


Habib Bank.

4. KASB Bank Karachi


In this bank account, the surplus funds from
Kharian are remitted on daily basis.

5. Arif Habib Bank Karachi

In this bank account, the surplus funds from


Mirpur Azad Kashmir are remitted on daily
basis.

BANK RECONSILIATION
Bank reconciliation is the process of comparing and
matching figures from the ledger against those
shown on a bank statement and bank reconciliation
statement.

Objectives
Bank reconciliation allows the entity to compare its
accounting records with the bank statement of their
account, in order to identify any possible
discrepancies. The main objectives of the process
are:

 To ensure that remitted funds are credited by


the bank in bank account, in a reasonable
period of time.
 To check the accuracy of funds deposited in
PIA’s bank account.

Bank Accounts Structure


50
Funds Management

Following two types of bank accounts are


maintained at PIA’s domestic and international
stations:

1) Collection Account (Account code


combination is 28-xxx)
All the cash collections and receipts are deposited
in this type of account. All the surplus funds are
transferred to the main composite accounts of head
office at pre-defined intervals which range from
daily to monthly transfers.

2) Imprest Account (Account code


combination is 27-xxx)
All the payments at stations are made from this type
of bank account. The closing balance at day end is
kept at nil/minimum in this account. All the required
funds for payment are transferred from respective
collection account and paid through this bank
account leaving the minimum day end balance. In
case of domestic imprest accounts, the balance of
these accounts is kept nil and the funds required to
make the payments are recouped from domestic
collection account.

Note:
Here ‘xxx’ stands for the 3 digit’s respective station
code.

Head Office Composite Accounts

 International Foreign Currency (FCY)


Composite Accounts:

1) Citibank New York (USD A/C)


2) Habib Allied International Bank London (Euro
A/C)
3) Habib Allied International Bank London (USD
A/C)

 Domestic Composite (PKR) Accounts:

1) HBL Karachi
2) UBL Karachi
3) NBP Karachi
4) KASB Bank Karachi
5) Arif Habib Bank Karachi


51
Funds Management

Reconciliation Process

At Station (Domestic & International):

At each station, following reports are prepared and


reconciled with bank
statement:

• Monthly collection report (R9)


• Bank deposits’ detail report

After this process, a bank reconciliation statement


(With adjusting entries to be made) is produced
which is sent to head office on monthly basis along
with above mentioned documents.

At Head Office

At head office, all the domestic and international


reconciliations are re-checked. A BR JV is prepared
to account for the following adjustments in D-base
module and forwarded to General Accounting for
further processing in mainframe:

• Bank Charges
• Remittances to or from HO composite bank
accounts in case of surplus from international
stations (Posted in Funds in Transit account)
• Transfer of funds from or to territories
• Funds transferred to Imprest account
• Gain/Loss on Exchange Transactions.

For all head office composite accounts, monthly


bank analysis report is produced with the help of
respective bank account statement. Funds in
Transit Account (International) is cleared, on the
basis of reported receipt of surplus funds from the
respective station, by passing a JV and the
differences, if any, are charged to exchange
gain/loss.

At month end, a bank reconciliation activity is


carried out for the reconciliation of composite bank
accounts (LCY & FCY). The following reports are
used in this activity:


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Funds Management

• Monthly bank analysis report


• Monthly disbursement report (D-15)
• Bank statement

The reconciling entries of bank reconciliation


statement are adjusted by passing BR JV, as
mentioned above. After passing the adjusting
entries, a bank reconciliation schedule is prepared
from D-base for each bank reconciliation statement.

PAYMENTS

All the FCY payments and major PKR payments, at


the head office are released/authorized through FM
section. The surplus funds from all the domestic
and international stations are accumulated in the
composite bank accounts of head office from where
all the payments, pertaining to head office’s various
departments are made.

Major payments made in head office, through FM


section, include:

1) Non fleet debt servicing (Funds Management


section)
2) Fleet debt servicing (Financial planning)
3) Insurance premium (Insurance & terminal
benefits section)
4) Salary (Payroll section)
5) Operating lease rentals (Corporate planning)
6) Engineering related payments (Technical
services payments section)
7) Stores purchases (Procurement & logistics)
8) Fuel, landing, parking and overflying
payments (Flight operations)
9) Precision engineering payments (Finance
Manager PEC)
10)Interline payments (Interline revenue)
11)Slip allowance (Flight operations)
12)Excise duty (Revenue accounting)
13)Tax free allowance (Payroll)
14) Misc. payments


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Funds Management

For each department, the main officials of the


respective department have been designated as the
authorized signatories, for the initiation of the
payment pertaining to that department.

Transfer of Surplus Funds

The process for cash management is as follows:

International Surpluses

• Transfer of surplus funds is usually made


after the realization of the BSP proceeds,
depending upon the BSP frequency.

• The competent official of the transferring


station intimates the concerned official at FM
section, via email, about the transfer of funds
specifying the amount of local currency
actually transferred.

• Concerned official follows up the delayed


transfers from stations or blocked funds in
the banking system and ensures timely
realization of the funds.

Domestic Surpluses

As mentioned earlier in this section, the surplus


funds at domestic collection accounts are
automatically transferred to the respective head
office composite account.

PROJECT

Assign by Ms Afshan Bhutto

 Bank Reconciliation

- Audit of collection accounts


54
Funds Management

- Documents Checking

- Checking of Late deposits and Late


credits

- Record keeping through Excel

- Complete all pending records

ABOUT PIA

1. Pakistan International Airlines (PIA) is facing very


huge losses.

2. There is over-employment in PIA.

3. Security Arrangements of Head Office and Aero


planes are not satisfactory.

4. Foreign Exchange Movements/Currency Exchange


Movements are affecting PIA’s Revenues and Costs
very badly.


55
Funds Management

5. Organizational Politics and Employees Unions are


not working in right Direction. They are enjoying
their own interests by misusing the Power.

6. Official Logos labeled with “Come fly with Us” is


still in use on various properties and assets of PIA.

7. Internship Program is conducted once in a year.

8. Internees are awarded with very low stipend amount


Rs: 3000/ only.

9. Saturday and Sunday are holidays

10. In PIA, an employee working hard, honestly,


sincerely, effectively and efficiently is treated same
as with an employee who is not working well.

SUGESTIONS

ABOUT PIA
1. PIA can take suitable actions to combat the losses or
may be privatized.

2. There may be down sizing.


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Funds Management

3. Security Arrangements of Head Office and Aero


planes may increase.

4. To hedge from Foreign Exchange


Movements/Currency Exchange Movements,
Derivatives, Forward Contracts, Future Contracts,
Future Options and other techniques may apply.

5. Organizational Politics and Employees Unions may


be controlled so as to work in proper and right
direction.

6. Official Logos labeled with “Come fly with us” may


be replaced with new one “Great People to Fly with
Us” on various properties and assets of PIA.

7. Internship Program may be conducted twice in a year


i.e. summer and Winter Internship Programs.

8. Internees may be awarded with stipend amount Rs:


10000/.

9. Only Sunday may be holiday as to get maximum out


put from employees.

10. In PIA, an employee working hard, honestly,


sincerely, effectively and efficiently may be treated
differently from an employee who is not working
well. He may be awarded with Promotions, Cash
Prizes, Certificates, Allowances, Bonuses and
Rewards.


57
Funds Management

ABOUT FUNDS MANAGEMENTSECTION


OF PIA
1. Systems (Both Hardware and software) operating
in Pension Section are very old

2. Rotations also necessary after perticular time


period.

3. Training needs assisments.(for efficiency and


effectivness)

4. Monthly meetings necesssary for promoting


employees morale.

5. Promotion policyshould be inproved.


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