How to Survive in Financial and Economic Crisis:( A Case Study of Airlink Communication LTD)

Abstract

This case documents how Airlink Communication Ltd, a leading mobile phone distributor and manufacturer in Pakistan not only survived but thrived in what can arguably be called “Pakistan's worst ever financial and economic crisis of 2022–2023”. During this period, Pakistan was going through a critical period of intense inflation, devaluation of currency and tight import controls which were a huge threat to businesses especially ones which relied heavily on imports like Airlink. Airlink, though a market leader, was not immune to the downturn. In 2023, its revenue dropped 20%, while its earnings per share (EPS) decreased by 41.74%. But the company implemented robust survival techniques to cope with the crisis. One of the most significant being the move towards local manufacturing that lessened reliance on imports and fell in line with the government’s ‘Make in Pakistan’ drive. This had been beneficial to Airlink in allowing it to stabilise operations and to control costs well. Another major contributing factor is the Rs 6 billion raised last year via its 2021 IPO, which gave it the financial buffer necessary to operate without having to take costly loans. Airlink also took a machete to its costs, streamlined its supply chain and diversified into e-commerce and regional sales to keep revenues ticking along. The Company took proactive financial risk management measures including exchange rate and price monitoring, and the negotiation of flexible payment terms with suppliers. These initiatives have served to mitigate the effects of inflation and of foreign currency risk. These two approaches in combination spurred an impressive come back by 2024. Airlink reported revenue of PKR 129.74 billion and EPS stood at Rs. 11.70 with an appreciation of 367%. The case of Airlink shows that, even during such severe economic uncertainty, a combination of the right timing, sound financial principles, and nimbleness can allow a company to not just make it through but also grow in the long run. This paper acts as a convenient manual for startups, entrepreneurs, investors and government officials in the developing world who want to understand how to better manage financial crises.