This refers to a letter titled 'PIA in profit?' by Mr. Irfan Butt that was published in The Nation on 04th June 2009. Our comments are as under. The fuel alone does not determine the airfare and fixation of ticket price is dependent on more than one factor. Generally, cost of operation for an airline comprises of direct fixed costs (such as depreciation, exchange-rate loss, leasing costs, debt servicing etc) and variable costs (such as fuel, landing charges, traffic handling, passenger meals, direct material and repairs etc) and indirect costs (such as working capital requirements and administrative expenses etc). Most of the aforementioned expenses, especially financing of our newly acquired airplanes, leasing of planes and loan repayment are settled in foreign currencies. With the recent economic downturn and consequent rupee devaluation, the outlay on these accounts has increased (as dollar exchange rate has risen from Rs. 62 to a dollar to Rs. 80 between Jan-Dec 2009, a devaluation of almost 23% for the year). In this scenario, PIA is required to maintain/adjust the fares (price of our product) accordingly to offset the above explained costs. It may also be noted that PIA operates in an industry where there is considerable competition. We are not in a monopolistic situation. This is especially true of international routes from which we generate 85% of our revenues. The results for the first quarter of 2009 also show an overall increase in seat factor by 2.3 percentage points over the same period last year. This is indicative of the fact that despite a worldwide economic crisis, PIA has been able to achieve growth in terms of additional passengers due to having fares in line with our competition. -SYED SULTAN HASSAN, General Manager, Public Affairs, PIA, Karachi, June 8.