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Sunday May 26, 2024

Loss-making PIA grounds 14 of 31 aircraft

Outgoing govt of then PM Shehbaz announced its plans to privatise PIA which accumulated billions of rupees in arrears over years

By News Desk
September 12, 2023
The Pakistan International Airlines (PIA) aircraft can be seen landing. — AFP/File
The Pakistan International Airlines (PIA) aircraft can be seen landing. — AFP/File

KARACHI: The Pakistan International Airlines (PIA) has grounded 14 out of its fleet of 31 aircraft, the national flag carrier’s spokesperson confirmed on Monday as the cash-strapped airline faces a severe financial crunch as it accumulates losses in the billions and faces mounting debt, the Arab News reported.

The outgoing government of then prime minister Shehbaz Sharif on August 7 announced its plans to privatize the national airline, which has accumulated hundreds of billions of rupees in arrears and losses over the years. Successive Pakistani governments have been doling out billions of rupees from their budgets to keep the loss-making public entity afloat.

Last week, Pakistan’s Caretaker Prime Minister Anwaar-ul-Haq Kakar called for finalizing a restructuring plan for the PIA, underscoring the urgency of securing its long-term survival. The move came on the heels of the government’s rejection of PIA’s appeal for a whopping Rs23 billion ($76 million) bailout package. PIA’s spokesperson Abdullah Khan confirmed to Arab News that as of Monday, Sept. 11, 14 of the airline’s 31 aircraft have been grounded primarily due to lack of funds for lease and spares support payments.

“Today, 14,” Khan told Arab News when asked how many of PIA’s aircraft were grounded. “Our interest support is frozen by the government. We have arranged some funding from the banks but will take time to materialize,” he added.

Another PIA official, who spoke to Arab News on condition of anonymity, warned that as many as 30 domestic flights would be suspended in the days to come if the funds are not dispersed.

“We fear the suspension of 30 domestic flights if funds are not disbursed promptly, and there is a looming threat of more aircraft being grounded,” he said. “PIA urgently requires Rs20 billion to meet pressing financial obligations, encompassing fuel payments, federal excise duty, and lease payments for its aircraft.”

As per reports, Pakistan’s aviation ministry has issued a stern warning to the government, suggesting that Boeing and Airbus multinational companies may cease their services to Pakistan due to non-payment of arrears involving creditors, aircraft lessors, fuel suppliers, and other critical stakeholders by mid-September.

The PIA’s woes were compounded after 2020 when the airline was already struggling financially in March while its flights were grounded due to the coronavirus pandemic. When the national airline resumed operations in May 2020, a domestic PIA flight crash in Karachi killed 97 out of 99 people on board, prompting an initial inquiry that pointed to a number of safety failures.

The inquiry sparked a disclosure from authorities that nearly a third of PIA’s pilots may have falsified their qualifications, prompting the European Union Aviation Safety Agency (EASA), the US Federal Aviation Administration (FAA) and other regulators to ban PIA flights.

Meanwhile, Ministry of Finance in a press release says that the reports appearing in a section of media regarding non-provision of financial support to PIA by the government are inaccurate and misleading.

Government of Pakistan has supported the national airline in the past and will continue to do so in the future as well. The Ministry of Finance and Ministry of Aviation are fully assisting PIA in arranging the finances required for it’s operational requirements. PIA, has only recently negotiated fresh credit facilities from financial institutions under the GoP guarantee limit provided to the airline by the Government of Pakistan. These credit facilities will help PIA to pay any overdue amounts and continue it’s operations without any interruption.