PIA Grounds Flights Amid Financial Crisis, Seeks Government Aid

Pakistan International Airlines (PIA), the national flag carrier of Pakistan, is facing a severe financial crisis that has led to the cancellation of numerous domestic and international flights. The airline’s operations have been significantly affected due to a shortage of funds, according to sources.


The financial crunch has forced PIA to cancel several flights to and from Karachi as it failed to pay Pakistan State Oil (PSO) for fuel supply. The cancelled flights include two Karachi-Muscat flights and two-way domestic ones from Karachi to Faisalabad, Islamabad, and Lahore. Flights from Karachi to Turbat, Bahawalpur, and Sukkur have also been cancelled.


In response to the crisis, PIA has approached the government for immediate provision of funds. The airline’s employees have also not been paid their salaries, adding to the growing concerns.


The financial woes of PIA are not new. In September, PIA had grounded five out of its 13 leased aircraft due to the prevailing financial crunch. The airline had asked for an emergency bailout of Rs22.9 billion which was rejected by the Economic Coordination Committee (ECC). The ECC also rejected the request for deferment of payments amounting to Rs1.3 billion per month, which PIA pays to FBR against FED and Rs0.7 billion per month which PIA pays to the Civil Aviation Authority (CAA) against embarking charges.


The Federal Board of Revenue (FBR) froze 13 PIA bank accounts due to non-payment of Rs8 billion in FED. The airline had also warned that Boeing and Airbus might suspend the supply of spare parts by mid-September.


Despite these challenges, last week, PIA announced the “easing” of its financial challenges following the release of critical funds by banks as a result of support from the government of Pakistan. The funds are expected to be used to clear long-standing dues of aircraft and engine leases, spare support and handling payments at foreign stations.


However, the Ministry of Aviation has stated that overhauling PIA is a “complicated” process and will take a year. During this time, it is imperative to keep the airline operational.


The current situation underscores the importance of sound financial management for airlines. As PIA navigates through this crisis, it serves as a reminder for other airlines about the potential risks associated with financial mismanagement.

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