The Pakistan government's response to a $77 million bailout proposal aimed at averting the financial collapse of the national carrier, Pakistan International Airlines, has been a resounding rejection. Instead, the government in Islamabad has put forth an alternative strategy: the development of a robust privatization plan backed by loans from commercial banks. This shift in approach is driven by the recognition that the current corporate structure of the airline is no longer economically viable.
Recent discussions between the airline's management and Pakistan's acting finance minister, Shamshad Akhtar, shed light on the pressing financial challenges facing the carrier. In response, the Ministry of Finance has communicated its willingness to allocate approximately $43 million to the airline, contingent on its utilization of bank loans. This signifies a clear dismissal of the airline's immediate plea for financial assistance.
To access bank loans, Pakistan International Airlines must now embark on a multifaceted journey. Firstly, it must formulate a comprehensive restructuring plan that addresses the operational areas responsible for the most significant financial losses. Additionally, the implementation of a new privatization strategy, distinct from the one blocked in 2016, is imperative. This revamped privatization plan is crucial for instilling confidence in the banks regarding the repayment of any loans extended to the airline.