Despite a request for Rs22.88 billion to keep its financial operations afloat, the Ministry of Finance in ISLAMABA is expected to release Rs14 billion to the struggling Pakistan International Airlines (PIA).
According to ministry sources, the PIA’s loan payments to other firms totaling Rs260 billion are also likely to be postponed. These loans are guaranteed by the federal government.
Due to unpaid federal excise duty, the Federal Board of Revenue (FBR) suspended the PIA’s bank accounts. Because of this decision, the PIA is now short on funds.
The airline was unable to pay its staff, affecting both domestic and some foreign flight operations. All bank accounts were later unfrozen by the FBR.
In light of its serious financial crisis and rising debt, PIA reported to an international media that 14 of its 31 aircraft had been grounded.
With hundreds of billions of rupees in arrears and losses amassed over the years, the previous PML-N led coalition government announced on August 7 its plans to privatise the national airline.
Each new administration in Pakistan has had to allocate billions of rupees to the failing state agency.
Last week, Caretaker Prime Minister Anwaarul Haq Kakar emphasised the importance of ensuring the PIA’s long-term viability by calling for the completion of a reorganisation plan. This followed the government’s decision to turn down PIA’s request for a massive Rs22.88 billion ($76 million) in bailout funds.
