PIA to upgrade fleet with 14 new planes by June

The airline will operate two direct flights in a week from Multan – one from Multan-Jeddah every Friday and the other from Multan-Madina every Saturday. PHOTO: FILE

MULTAN: Bringing good news with the start of the new year, Aviation Secretary Muhammad Ali Gardezi has said the fleet of Pakistan International Airlines (PIA) will be upgraded with the addition of 14 new airplanes before June this year.

He was speaking at a ceremony held to mark the launch of direct flights from Multan to Jeddah, Saudi Arabia on Friday. The airline will operate two direct flights in a week from Multan – one from Multan-Jeddah every Friday and the other from Multan-Madina every Saturday.

Four new planes have already arrived while five others, which have been approved by the government, will reach this month. The remaining five will be delivered to PIA by June this year.

Elaborating, Gardezi, who is also the chairman of PIA, said four airplanes had been taken on lease and three more would be acquired on lease of six years.

He pointed out that the major reason behind the losses suffered by the air carrier was the use of airplanes on wrong routes. Before the current management took over, he said, big planes were used on small routes and small planes operated on big routes.

“At present, PIA is earning Rs8 billion a month and our target is Rs15 billion,” he claimed.

Despite losses and high fuel prices, he said, PIA had expanded its network all across the world. “We have started four flights a week to Toronto (Canada) and Kuala Lumpur (Malaysia). More international routes will be introduced.”

Talking about challenges, Gardezi said the biggest challenge the carrier faced was higher fuel prices. “We are paying 56% of our total revenues to cover fuel expenses and only 18% goes for payment of salaries to the employees.”

Discussing the start of flights from Multan to Saudi Arabia, he said a longstanding demand had been met of the residents of Multan, Dera Ghazi Khan, Bahawalpur, Rahim Yar Khan and adjoining areas. With the completion of a new terminal at the Multan Airport, PIA will operate more international flights from there.

He stressed that the PIA management was making efforts to make the carrier a profitable entity by notching up revenues and reducing costs without compromising on service standards.

Gwadar port to open economic portals: Afridi

The Gwadar project has the potential to give boost to the present crippled economy in a short span of time Chairman Standing Committee, Colonel (Retd) Maqbool Afridi.PHOTO: FILE

ISLAMABAD: The Gwadar port project can serve as a key to economic development of the country and drastically improve the lives of the people of Balochistan if its potential is exploited to bolster trade in the region, said Standing Committee Gwadar Promotion and Development Chairman Colonel (Retd) Maqbool Afridi.

The official believed that the natural resources of Africa can be easily shipped to Gwadar and, after value addition, can be reshipped to the global consumer’s markets. “The Gwadar project has the potential to give boost to the present crippled economy of the country in a short span of time,” said Afridi. “Due to its geostrategic location, the Central Asian Republics (CARS) have a short route to world markets and at the same time the developed countries have an easy access to the CARS’ natural resources.”

According to Afridi, the port is well poised to conduct transshipment as well as transit trade, adding that Dubai is earning billions of dollars yearly from transshipment which is 700 km ahead of Gwadar and has to pass through Strait of Hormuz which is a restricted ship movement.

“For transshipment and transit trade there is not a single county which is not dependent on Dubai, Iran, Oman or Pakistan.”   He said Gwadar is a natural deep sea port, different from neighboring ports of Iran and Dubai and has the capacity to have 88 berths and the ability to anchor ships of 1,00,000 to 2,00,000 dead weight tonnage.

“The business and job opportunities created enroute from south (Gwadar) till north (Kunjrab) will benefit all provinces of the country immensely.”

More costly: Pak Suzuki choosing to ride on margins

Pak Suzuki raised prices by 1.5% (or Rs10, 000 to Rs25,000) on different car variants despite 12.23% year on year depreciation in yen against Pak rupee during 2013. PHOTO: FILE

KARACHI: Analyst’s on Friday stated that the decision of Pakistan Suzuki Motors – country’s biggest car maker – to raise car prices on the very first day of 2014 is going to increase its margins but it may dampen its volumetric sales.

This was the first car price hike from any of the three leading car makers in the country. All these car producers raised their prices at different occasions in the previous year.

Pak Suzuki spokesperson said that the company took the step to offset the pressure of rupee depreciation against the dollar and other inflationary effects in recent months.

Meanwhile, InvestCap Research report said that the timing of the price increase was ‘surprising’. “The price increase at this time appears surprising and is expected to improve profitability in the coming year,” read the report. “However, considering the already peaked prices of different variants of the company, the recent price hike may limit gains as volumetric sale of the company may somewhat decline.”

Pak Suzuki raised prices by 1.5% (or Rs10, 000 to Rs25,000) on different car variants despite 12.23% year on year depreciation in yen against Pak rupee during 2013.

“Pak Suzuki must benefit from this price hike, this may have come to offset the effects of electricity prices that the government raised in August 2013,” JS Global Capital analyst Atif Zafar told The Express Tribune.

Analysts say local automobile companies benefitted from the depreciation of yen against rupee in the last three months, which has gained 9% against Yen.

However, dollar appreciation against the rupee during this same period did affect margins of auto companies. For instance, dollar appreciated by 4.7% against rupee and 1.7% yen from October to December 2013.

“The depreciation of rupee and yen against dollar in the fourth quarter of 2013 (October to December) is supposed to be the major factor behind the current rise in cars sale prices,” InvestCap Research report added.

Local car producers received positive news last year when the government reduced the age limit of used car imports from 5 years to 3 years. Due to this decision the imports of used cars gradually dropped in the last 12 months and the sales of locally produced cars increased.

Car importers have demanded the government to reverse this age limit and allow the import of cars at least 5years old in order to increase the competition for local carmakers. However, the local industry maintains that any increase in used car imports will hurt the sales of new cars in the country and hence it is damaging for the industry

The World’s Largest Economies

Emerging economies are smaller than the developed countries - but they are growing faster and opening up, leading to greater investment opportunities than ever before.

There are two methods of GDP calculation: nominal GDP attempts to compare countries using current exchange rates to give an assessment of their clout within the global market. This naturally biases countries with stronger currencies.

Purchasing Power Parity or PPP GDP, on the other hand, tries to take into account that one dollar can buy more in some countries and less in others. It is a better gauge of the internal size of each market.

In the nominal GDP method, we can see that the developed world leads the pack, but that China has already broken into this exclusive club, and is now the second largest economy in the world by both measures.

When we look at PPP GDP, all of the BRIC countries (China, India, Brazil and Russia) are all within the top 10.

Here is the Top 10, as listed by PPP GDP, using 2010 GDP figures:

Ranking	Country	Approximate GDP- Purchasing Power Parity
1	United States of America	$14,624,180,000,000 (that is $14.6 trillion dollars if you are trying to count zeros)
2	China	$10,084,370,000,000
3	Japan	$4,308,630,000,000
4	India	$4,001,100,000,000
5	Germany	$2,932,040,000,000
6	Russia	$2,218,760,000,000
7	Brazil	$2,181,680,000,000
8	United Kingdom	$2,181,070,000,000
9	France	$2,146,280,000,000
10	Italy	$1,771,140,000,000

While the US is still the world's dominant economy, and central to the global economic system thanks to the simple fact that the US dollar is the world's reserve currency (ie the currency that we all need in order to trade), we can clearly see that China's clout is rapidly growing. The numbers tell the story not just of the BRIC, but also the G2 or Chamerica, as some are calling the US/ China combo.

FY2013: Telecom sector’s revenues reach all-time high

The sector’s revenues increased by a third, 33.5% to be exact, during the last five years when compared with Rs333.8 billion the industry had grossed in FY09. PHOTO: FILE

KARACHI: 

Telecom sector’s revenues reached an all-time high, increasing by nearly one tenth, as the industry added almost 10 million new cellular connections in the fiscal year 2013, Pakistan Telecommunication Authority revealed in its annual report.

With a major contribution of Rs438 billion or $4.1 billion coming from the five cellular mobile operators (CMOs), telecom sector’s revenues increased to Rs445.7 billion at the end of June 2013, up 9% from Rs409 billion in FY2012.

The sector’s revenues increased by a third, 33.5% to be exact, during the last five years when compared with Rs333.8 billion the industry had grossed in FY09.

The steady growth came on the back of the country’s growing teledensity, which stood at over 75% at the end of FY13, translating to an increase of almost four percentage points over 71.73% in the previous fiscal year. CMOs that cover 71.7% of the population were again the major contributor.

Total number of cellular subscribers increased by 7% to 128.9 million in FY13 when compared with 120 million as of June, 30, 2012 – indicating a steady growth from FY10 to FY13.

When it comes to tax

Telecom is one of the highest tax-paying sectors. The sector, on average, has contributed Rs119 billion a year to the national exchequer between FY09 and FY13. However, its contribution to the national exchequer decreased to Rs124.7 billion during FY13, down by 6.5% from Rs133.4 billion of the last fiscal year.

A breakdown of tax collection showed a 64% year-on-year decrease in PTA’s deposits to the exchequer. The report, however, added that the PTA received Rs6.8 billion from the operators under various regulatory heads and deposited into the nation exchequer till March, 2013.

The investment in the telecom sector saw a significant increase. During FY13, a total of $451 million investment was reported in the sector, which translates to a 47% growth over $240 million in the previous year – CMOs were again the major contributor, investing $421.5 million during the period under review.

With the addition of FY13 telecom investment, the sector was able to attract over $12 billion of investments from FY06 to FY12, according to the report.

The report, however, said the companies reduced their investments in the last two years as they already established most of their networks.

Telecom sector had attracted $6 billion in foreign direct investment (FDI) since FY06 but FY13 ended on a negative note. FDI in telecom sector remained on the negative side of the scale as outflows of $408 million were reported during FY2013.

However, the telecom regulator stated in its report that the FDI outflow could be turned around with auction of mobile spectrum for high-speed internet services, which it expects to complete in the third quarter of FY14.

The report also showed that the imports of telecom equipment including mobile handsets reached almost $1 billion – $918 million to be exact – in FY2013. This, however, was a slight decline from $954 of FY2012, according to PTA’s report.

“The telecom sector continued to grow on a steady pace during FY13 with telecom services, covering 92% of the land area and 75% of the population,” PTA Chairman Syed Ismail Shah was quoted in the
report as saying.

While expressing his vision, the chairman stated he was aiming for an advanced, technology driven, consumer oriented and business friendly environment where fair competition, affordable tariffs, high quality of services and extended land coverage would be the success benchmarks.

U-turn from Xabi Alonso

The clouds on the horizon have lifted. In a whirlwind last 24 hours, there has been a major breakthrough, cutting through the doom and gloom that had begun to surround the issue of Xabi Alonso's future and causing a seismic shift in the mood.

MARCA.com can reveal that Xabi has more or less made his mind up and has instructed his friend and agent, Iñaki Ibañez, to begin negotiating a new contract. In other words, his first choice is to stay at the Bernabéu.

Talks on a new deal won't begin until after 6th January, which is a public holiday in Spain. The issues up for discussion will be the length of the contract and his wage packet. The 32-year-old will want a minimum two-year extension, with a possible optional third year related to his performances and fitness. As for the financials, a salary of around €7 million a season is likely.

There can be no doubting Real Madrid's eagerness to tie Alonso down. Florentino Pérez himself told the midfielder as much when they last spoke, around a month ago.

'Los Blancos' are convinced that Alonso won't find the same levels of respect and affection he receives at the Bernabéu anywhere else. For instance, having still not fully shaken off his groin injury, Xabi will be given a say in everything related to his fitness. He will be offered free rein to determine his regime, when he needs a break and when to play on, together with the coaching and medical staff and depending on the team's needs.

BAYERN AND 'LOS BLANCOS' ARE CHAMPIONS LEAGUE FAVOURITES

Bookies betting on Real-Guardiola reunion

R. JIMÉNEZ 12/28/2013

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The latest bookies' odds have installed Bayern Munich and Real Madrid as heavy favourites to win the Champions League. Guardiola's side is priced at an eye-catching 47/20, while Real's odds have been tumbling ever since the competition got underway, recently falling from 19/4 to 22/5.

Barcelona's chances of lifting the trophy have taken a real beating at the bookmakers ever since the draw for the last 16 was announced, in which the 'Azulgranas' were pitted against the strongest possible opponents in Manchester City.

Martino's men had been the second favourites after Bayern throughout the group stage, but now stand third in the reckoning with odds of 57/10, a far cry from the price of 9/2 that was available a few weeks ago.

Borussia Dortmund and Chelsea are the next most fancied teams with odds of 121/10 and 129/10 respectively, making them potentially lucrative longer shots.

The biggest surprise package in the competition has been Atlético de Madrid, which easily topped its group and now faces a tie against what is far from a vintage Milan side.

The mood among the bookmakers reflects the confidence at the Calderón, with Atlético currently tipped as the sixth favourites at 13/1. This makes for incredible reading, especially when you consider that the 'Rojiblancos' were rank outsiders before the group-stage draw, with odds of 66/1