The document provides an overview of the functions and operations of key departments within the Finance Department of Pakistan International Airlines (PIA). It describes PIA's route network and the roles of departments such as Revenue Accounting, Budget and Costing, Fuel, Funds Management, General Accounting, and Procurement and Logistics in managing finances, accounting, and related activities. Key responsibilities include revenue collection, budget preparation, fuel procurement, treasury management, financial reporting, payroll, and invoice processing. The document also highlights some achievements in areas like cost savings, system upgrades, and improved financial controls and reporting.

1. Finance Department : Pakistan International Airlines 1
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2. Finance Department : Pakistan International Airlines
Introduction
• PIA was the first corporation to get computer in 1982
provided by Zia ul Haq
• PIA is the flag carrier of Pakistan
• government owns 85 percent of its shares.
• PIA's route network stretches to Asia, the Middle
East, Africa, Europe, and North America.
• It connects 35 cities within Pakistan. Six million
people flew the airline in 2000, when passenger
traffic accounted for 85 percent of revenues.
• Engineering and charter services accounted for nine
percent. PIA also conducts some contract work for
aerospace manufacturers.
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3. Finance Department : Pakistan International Airlines
Functions
• PIA developed its own booking and
reservations systems
• and accounting software
• It still uses the same fotware which has been
updated by internal IT department
• COSSAP
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4. Finance Department : Pakistan International Airlines
• PIA has 35 international offices and about 42
local
• e.g. Newyork, toronto, london, dubai, jeddah,
hongkong, delhi, kualalumpur
• e.g. peshawer,pindi, isb, saidusharif, karachi,
lahore, mukltan, faisalabad
• finance collects information form all these
stations, this takes time
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5. Finance Department : Pakistan International Airlines
• all stations have been installed with COSSAP
• sales from offices, agents is recorded locally at
the stations.
• expenses and liabilities are also recorded
there
• at month end all stations send their data
which is collated in the head office
• other than stations there are various entry
points at head office also
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6. Finance Department : Pakistan International Airlines
• e.g. Engineering FInance to record maintenace and
engineering expenses
• Procurement and logistics: to record purchases in bulk
items, food, stationary uniforms etc...
• Headoffice payments:: Manages payments of head
office. Electricy phone some stationary items, etc.
• Cargo finance: records cargo sales
• Revenue: Passenger ticket sale, Cargo sale, Excess
Baggage sale, Charter flights, Engineering Services
• Most of the revenue is from passenger sales i.e. ticket
sale 90%
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7. Finance Department : Pakistan International Airlines 7
Managing Director
Chief Financial
Officer
GM Revenue
Accounting
GM Budget GM Fuel
GM General
Accounting
GM Funds
Management
FINANCE - Roles and Responsibilities
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8. Finance Department : Pakistan International Airlines
• Revenue Accounting Division comprises of following
sections:
– Passenger Revenue
– Credit Control
– Interline / Cargo Revenue
– Stations Control
– Station Automation
Revenue Accounting Division
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9. Finance Department : Pakistan International Airlines 02/04/2012 9
GM Revenue
Accounting
DGM Pax
Revenue
Manager (Pax
Revenue)
Manager
Interline &
Cargo
Manager
Stations
Control
Manager
Stations
Automation

10. Finance Department : Pakistan International Airlines
Cargo Revenue
– Monitoring of Sales, Receivables, Bank Guarantee Coverage and CASS
reporting
– Matching of Lift and Sales Airway Bills
– Billing and recovery from Pakistan Post
Interline Revenue
– Billing of Pax, Cargo and Miscellaneous Interline invoices
– Verification of incoming Pax and Cargo Interline Billing
– Coordination with relevant departments for Miscellaneous Interline billing e.g.
GDS and other systems being used by PIA
– Monitoring of all receipts and payments through IATA Clearing House
Station Automation
– Coordinating with IT department for the development & Testing of COSSAP IV
that will replace the previous version developed in-house during 1988 which is
almost on the verge of collapse
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WORK OVERVIEW – CARGO, INTERLINE REVENUE &
STATION AUTOMATION
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11. Finance Department : Pakistan International Airlines
Cost savings & Revenue Assurance:
• Third party acquired solution-Aries meant for lift data processing got replaced by in
house developed lift solution resultantly cost savings of GBP. 31,500/- on annual basis
were achieved
• Data migration from PK based servers to Sabre Airline solutions resulted in cost savings
of PKR. 11 Million approximately (Hardware cost Rs.7 Million, Oracle license Fee Rs.4
Million)
• Development of in house BSP Fare Audit system & random auditing job resulted in cash
recovery of PKR. 35 Million approximately on account of short collections observed in
relation to published fares
Revenue Accounting - Achievements
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12. Finance Department : Pakistan International Airlines
Efforts for Effective & Efficient Internal Controls
• MIS of financial exposure against bank guarantees has been made monthly feature.
• Standard operating procedures on refunds, ASR, EBT, Advances reporting, discrepancy
advices, Travel authorization certificates has been formulated, got duly vetted by the
Management & are in place on entire network presently
• Credit control section has been rejuvenated. MIS has been formalized and CCCMs are
being effectively held & centralized monitored for strict compliance of credit policy
• Agent Ledger had not been prepared since 1995. Exercise for the compilation of
relevant data for the last 10 years has been accomplished which has been submitted to
the Auditors for their verification
Revenue Accounting - Achievements
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13. Finance Department : Pakistan International Airlines
1. Compilation of Annual Budget
• Developing Sector-wise rates for various direct operating cost (DOC)
elements
• Compilation of annual revenue budget and DOC elements budget based on
Marketing plan
• Providing assistance in the preparation of shop-wise budgets
• Analyzing & consolidating shop-wise budgets into an overall corporate
budget
• Assisting higher management in the budget review and approval process
• Preparing month-wise budget from the duly approved corporate budget
2. Monitor/evaluate and provide monthly reports showing the actual
results vis-à-vis the budget
Budget & Costing - Overview
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14. Finance Department : Pakistan International Airlines
Budget & Costing - Overview
14
3. Preparing route-wise/aircraft-wise analysis for management to aid
in route management decisions
4. Evaluation/review of projects/feasibilities and assist management
in its decision making process
5. Maintenance of statistical data and submission of reports to
various agencies/organizations like CAA, IATA
6. Allocation of budget for capital expenditures exceeding PKR
10,000
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15. Finance Department : Pakistan International Airlines
Fuel Division - Overview
15
• Assist in tendering process and selection of jet fuel supplier for domestic and
foreign locations
• Management of fuel supply contracts and relationship management
• Management of fuel data and verification of fuel bills for payments
• Assist Fuel hedging committee in risk management through hedging.
• Verification of invoices for aeronautical charges like Overflying, Landing and
Parking for payment processing
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16. Finance Department : Pakistan International Airlines
Funds Management - Organogram
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General
Manager
DGM - Funds
Management
()
Manager –I ()
Asst. Manager
Manager –II ()
DGM -
Insurance ()
Manager ()
Asst. Manager
Asst. Manager
()

17. Finance Department : Pakistan International Airlines
Funds Management Division
Funds Management &
Treasury Section
Insurance Section
- Opening / operation of PIA bank accounts
globally
- Arrangements for short term & long term
working capital loans
- Arrangements for fleet financing
-Arrangements for bank guarantees & L/C lines
- Cash flow statements
- Working capital and fleet loan repayments
- Control on FX payments from Head Office
- Supervision of bank reconciliations
-Exchange rates/interest rates checking
- Daily MIS report
Insurance covers for:
- PIA Fleet
- Assets / Properties
- Buildings / Installations
- Vehicles
- IT Equipments
- Marine / Transit
- Stores & Spares
- Group Life
- Loss of license of cockpit crew
- Cash , Cash in transit, etc
- Insurance claims & settlement
Funds Management Division – Functions
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18. Finance Department : Pakistan International Airlines
Funds Management - Achievements
• Arranged new loans:
– PKR 30.54 billion during 2011
– PKR 25.06 billion during 2012
• Arranged USD 100 million Islamic syndicated financing facility that won Air
finance Journal’s “Best Asian Deal award”
• Savings of USD 1.3 million (9%) on 2012 Insurance agreement
• Revamping of the Treasury. Global Cash Management being implemented with
Citibank
• Monitoring of exchange rates / Interest rates through Citi Fx Pulse terminal
• New software for pension fund under preparation
• RBS loan assigned to Citi resulting in USD 150K earning
• Arranged USD 35 million financing facility from Standard Chartered Bank
• Savings of PKR 4.78 million through interest rate checking during 2011.
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19. Finance Department : Pakistan International Airlines
General Accounting:
• Preparation of year end and interim financial statements and monthly closing
• Maintenance of fixed assets register
• Custodians of the general ledgers, accounting schedules and other financial data
• Coordination with the external auditors in relation to the audit & review of year end
• Selection and implementation of appropriate Accounting Policies under IFRS and
Companies Ordinance, 1984 and PIAC Act, 1956
• Suggest improvements in financial polices and procedures for efficiency and financial
controls
Disbursement:
• Perform post audit of all payments made at stations
• Monthly Reporting of observations to stations and follow up on responses
• Initiate recoveries and suggest remedial measures in case of contravention of policies
and procedures
• Accounting for Liabilities, Provisions and Advances
• Custodians of Disbursement Report and all original invoices of all stations
• Accumulation of data from stations regarding WHT and GST deducted
• Filing of Sales Tax Return monthly
General Accounting - Overview
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20. Finance Department : Pakistan International Airlines 20
Head Office Payment:
• Make payments to contractors, Government Organizations and other out side
parties and provide assistance in financial matters to the respective
Departments
• Custodians of Disbursement and all original Supporting documents of the
department
Flight Operation (Finance):
• Disbursement of Fuel Bills, Landing, Overflying and subscription charges at
Domestic and International stations
• Maintain record of relevant contracts and payments of bills, as per contractual
obligations
Taxation:
• Preparation of tax declarations for all countries where PIA is required to files
and settle any subsequent tax audit
• Maintenance of tax records and correspondence with FBR and other authorities
General Accounting - Overview
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21. Finance Department : Pakistan International Airlines 21
Payroll:
• Preparation of monthly payroll at Head Office Level
• Final settlement
• TA/DA control and its follow-up for finalization
• Ensure that deductions at source for provident fund, individual income taxes,
etc. are accurate and properly accounted for
General Accounting - Overview
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Procurement and Logistics (Finance):
• Monitor timely payment of invoices/claims
• Ensure that all agreements with suppliers are valid and duly approved by concerned
competent authority
• Monitor the process of L/C and clear all payments through station/bank transfer on
account of foreign Purchase Orders against approval and agreements

22. Finance Department : Pakistan International Airlines
• Reduction in Financial reporting time from 20th to 15th of every month
• Deloitte’s report on stores is being implemented
• Integration of POSS and General Ledger for Commercial Purchases and
Inventory.
• Played a pivotal role in process of issuance of computerized Purchase
Orders through POSS.
• Reconciled major portion of differences between POSS and PAMMIS.
• Preparing a utility on POSS for avoidance of duplicate payments and
PO/Invoice matching.
Accounting Division - Achievements
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23. Finance Department : Pakistan International Airlines
Thank You
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