KARACHI - PIA's overall revenue increased by Rs 18.7 billion (26.6%) to Rs 89.2 billion due to what was described as an increase in passenger revenue by Rs 17.8 billion, Rs 0.6 billion in cargo revenue and Rs 0.22 billion in Engineering revenue. Passenger revenue increased by Rs 17.8 billion (28.7%) to Rs 79.8 billion, due to higher passenger yields on scheduled services on overall basis by 28.9%, the PIA Board of Directors which met here Thursday under the chairmanship of Defence Minister Ahmed Mukhtar was informed. The Board was apprised of PIA's financial & operational performance during the y%ar 2008 and told that despite rising inflation rate throughout the year, the Corporation achieved success in its cost cutting measures and as a result the management was able to contain the increase in non-fuel expenses, excluding depreciation. It was informed that PIA enhanced its product between New York to Pakistan by introducing non-stop flights with efficient, long range aircraft 777 which considerably reduced the travel time for incoming passengers and as a cumulative result of endeavors, PIA's traffic performance in the last quarter of 2008 remained quite promising. The outgoing year was termed exceptionally difficult as PIA was affected by extraordinary increase in fuel cost. The weaker Pakistani rupee also severely affected the airline's financial position and PIA had to book huge loss on its US Dollars loans. The fall in the value of Pound Sterling and Euro against US Dollar was a source of revenue dilution which had depressed yields. The high level of inflation in the country also exerted pressure on the cost structure. Paradoxical as it may appear - given the record net loss of Rs 35.88 billion in 2008, PIA was able to partially overcome these limitations at the end of year 2008. The Board was informed that loss in 2008 was mainly caused by two extraneous factors which were beyond the control of the airline. Firstly, the Pak rupee lost its value against US Dollar, contributing to a net exchange loss of Rs. 24.1 billion and secondly, because of crude oil prices reaching the highest ever level of US $ 147 per barrel in July and contributing an increase of Rs. 15.5 billion in the fuel expense over last year. The Board approved establishment of a new Flying Academy named as "Shaheed Benazir Bhutto Flight Academy" at Nawabshah. The meeting was attended, among others, by Managing Director Capt Mohammad Aijaz Haroon, Syed Naseer Ahmed, Malik Nazir Ahmad, Mr Javed Akhtar, Secretary Defence Lt. Gen. (Rtd) Syed Athar Ali, Secretary Defence, Prof Mian Ijaz Ul Hassan, Mr. Mubashir Iftikhar, Mr. Husain Lawai and Mr. Shaukat Ali Rana.