The Pakistan government’s response to a $77 million bailout proposal aimedat averting the financial collapse of the national carrier, PakistanInternational Airlines, has been a resounding rejection. Instead, thegovernment in Islamabad has put forth an alternative strategy: thedevelopment of a robust privatization plan backed by loans from commercialbanks. This shift in approach is driven by the recognition that the currentcorporate structure of the airline is no longer economically viable.
Recent discussions between the airline’s management and Pakistan’s actingfinance minister, Shamshad Akhtar, shed light on the pressing financialchallenges facing the carrier. In response, the Ministry of Finance hascommunicated its willingness to allocate approximately $43 million to theairline, contingent on its utilization of bank loans. This signifies aclear dismissal of the airline’s immediate plea for financial assistance.
To access bank loans, Pakistan International Airlines must now embark on amultifaceted journey. Firstly, it must formulate a comprehensiverestructuring plan that addresses the operational areas responsible for themost significant financial losses. Additionally, the implementation of anew privatization strategy, distinct from the one blocked in 2016, isimperative. This revamped privatization plan is crucial for instillingconfidence in the banks regarding the repayment of any loans extended tothe airline.
