Pakistan International Airlines (PIA) is facing a critical financial crisis that has prompted the airline to issue a warning of potential supply suspensions for spare parts by Boeing and Airbus by mid-September.
To address this dire situation, PIA has appealed for an emergency bailout from the Economic Coordination Committee (ECC). The airline’s financial distress stems from its inability to meet obligations to various stakeholders, including creditors, lessors, fuel suppliers, and airport operators, due to a severe liquidity crisis. As a result, PIA has already grounded five of its 13 leased aircraft, with four more anticipated to follow suit.
PIA has underlined the significance of maintaining its operations in determining a fair share price for its eventual privatization. However, in response to PIA’s plea, the ECC meeting rejected the airline’s request for Rs22.9 billion in financial support and the deferment of Rs1.3 billion per month to the Federal Bureau of Revenue (FBR), as well as loans and interest payments until the completion of the restructuring plan.
During the meeting, the Ministry of Aviation provided a detailed overview of PIA’s financial challenges, emphasizing the urgent need for a comprehensive restructuring plan.
The rejection of PIA’s plea for financial support and restructuring assistance by the ECC meeting raises uncertainty about the future of Pakistan International Airlines. The decision highlights the challenges the airline faces in maintaining its operations and privatization efforts amidst a severe liquidity crisis.
