The Pakistan International Airlines (PIA), the national flag carrier, is facing a financial crisis, prompting the Ministry of Finance to consider releasing approximately Rs14 billion. This falls short of the airline’s request for Rs22.88 billion to sustain its financial operations.
Inside sources at the ministry suggest that the repayment of PIA’s substantial loans, totaling Rs260 billion and backed by the federal government, may also be postponed. This step is being explored as a means to alleviate the financial burden on the airline.
The Federal Board of Revenue (FBR) had previously frozen PIA’s accounts due to non-payment of federal excise duty, severely impacting the airline’s ability to operate both domestic and select international flights and pay its employees. Subsequently, all bank accounts were unfrozen by the FBR.
A PIA spokesperson recently confirmed that the airline has grounded 14 out of its 31 aircraft due to its dire financial situation and increasing debt.
The previous government, led by the PML-N coalition, had announced plans to privatize the national airline on August 7. The airline has accrued substantial arrears and losses over the years, prompting successive Pakistani governments to allocate significant funds from their budgets to keep it afloat.
Caretaker Prime Minister Anwaarul Haq Kakar, in a recent development, has called for the swift finalization of a restructuring plan for PIA, emphasizing the urgency of ensuring its long-term survival. This comes in the wake of the government’s rejection of PIA’s request for a substantial Rs22.88 billion ($76 million) bailout package.