Pakistan International Airlines (PIA) finds itself in the throes of a severe financial predicament, forcing the airline to issue a stark warning regarding the potential suspension of spare parts supply from Boeing and Airbus by mid-September.
In a bid to tackle this critical situation head-on, PIA has earnestly sought an emergency bailout from the Economic Coordination Committee (ECC). The airline’s financial woes are deeply rooted in its inability to fulfill obligations to a multitude of stakeholders, including creditors, lessors, fuel providers, and airport operators, all stemming from an acute liquidity crisis. Consequently, PIA has already grounded five out of its 13 leased aircraft, with an anticipated four more following suit.
Highlighting the significance of its operational continuity in determining a just share price for its eventual privatization, PIA has emphasized its predicament to the ECC. However, in response to PIA’s plea, the ECC meeting rejected the airline’s request for a financial lifeline of Rs22.9 billion, as well as the deferment of Rs1.3 billion per month owed to the Federal Bureau of Revenue (FBR). Additionally, appeals for loans and the postponement of interest payments until the restructuring plan’s completion were also turned down.
During the meeting, the Ministry of Aviation presented a comprehensive overview of PIA’s financial challenges, underscoring the urgent need for a robust and all-encompassing restructuring plan.
The ECC meeting’s rejection of PIA’s plea for financial support and restructuring assistance casts a shadow of uncertainty over the future of Pakistan International Airlines. This decision starkly underscores the formidable obstacles the airline confronts as it strives to maintain its operations and advance privatization efforts amid an unrelenting liquidity crisis.