PIA faces worst ever economic shock of its history
Pakistan International Airlines (PIA) has sounded the alarm, cautioning that both Boeing and Airbus may halt the provision of spare aircraft parts by mid-September due to severe financial woes plaguing the national carrier.
PIA conveyed its dire predicament to the Economic Coordination Committee (ECC), seeking an emergency bailout. The airline's financial hardship has left it unable to meet its obligations to creditors, aircraft lessors, fuel suppliers, airport operators, the International Air Transport Association (IATA), and other stakeholders.
In response to this crisis, PIA has already been forced to ground five out of its fleet of 13 leased aircraft, with an additional four aircraft teetering on the brink of grounding in the coming week.
The gravity of the situation is underlined by PIA's assertion that the continued operation of the state-run airline is imperative not only for its immediate survival but also to ascertain an equitable valuation of its shares in preparation for privatization.
However, in a recent development, the ECC meeting convened on Wednesday rejected PIA's plea for a bailout package amounting to Rs22.9 billion and the deferment of Rs1.3 billion per month to the Federal Bureau of Revenue (FBR), as well as the request for loans and interest deferrals until the finalization of the restructuring plan.
During the meeting, the Ministry of Aviation presented a comprehensive summary titled "Financial Support for PIACL & its Restructuring," with the Secretary of Aviation delivering an extensive briefing to elucidate the financial challenges and liabilities confronting PIA, emphasizing the critical need for a comprehensive organizational restructuring to navigate these turbulent financial waters.