Pakistan International Airlines (PIA) is facing significant challenges as it grapples with a severe financial crisis.
According to reports from an international news outlet, PIA has begun to reduce its flight operations due to this financial crunch and is actively seeking a government bailout to address its mounting debts and unpaid bills.
In the past, Pakistani authorities have allocated substantial funds to support the state-owned airline in meeting its operational expenses. However, despite these injections of capital, PIA has accumulated substantial debts and losses over the years.
During the previous administration under Prime Minister Shehbaz Sharif, there was an expressed intention to privatize the airline. More recently, the caretaker government has directed relevant authorities to finalize a restructuring plan for PIA.
It’s worth noting that the current government has declined PIA’s request for a bailout package of Rs23 billion ($76 million) to alleviate its financial crisis. The situation is dire, with PIA owing at least $100 million to multiple leasing firms involved in chartering aircraft, airport authorities, and aircraft spares, among other obligations. The airline is also struggling to pay employee salaries and airport charges.
As unpaid bills continue to accumulate and lessors withhold aircraft due to overdue payments, PIA has been forced to scale back its operations. This development comes at a time when Pakistan is grappling with its own economic crisis and has recently secured a $3 billion loan from the International Monetary Fund to avoid a sovereign debt default.
The Economic Coordination Committee (ECC) of Pakistan has now instructed the Finance Division and the State Bank of Pakistan to consider financial support for PIA, but only after a restructuring plan has been thoroughly reviewed and approved.
In the midst of these challenges, Pakistan’s national carrier, PIA, faces an uphill battle to secure its financial stability.
