Some sigh of relief for cash stripped PIA
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In Karachi, the Pakistan International Airlines (PIA) faced a critical financial situation that was threatening to disrupt its flight operations. To address this crisis, the airline successfully secured a substantial loan of Rs18 billion from two banks. This significant influx of funds proved instrumental in clearing the essential outstanding debts, thereby preventing the suspension of flight services.
PIA's spokesperson, Abdullah Khan, confirmed this development, emphasizing the importance of these loans in maintaining the airline's operations. Furthermore, Khan assured that PIA had dutifully met its payroll obligations by disbursing salaries to its employees, ensuring smooth functioning. Despite the financial turbulence, PIA has maintained uninterrupted flight operations both domestically and internationally. Khan affirmed that all flights continued to operate seamlessly.
Highlighting the airline's resilience, he stressed that PIA's solid foundation and extensive global network provided the capacity to navigate challenging circumstances. With an ample fleet of aircraft dedicated to both international and domestic flights, PIA remained committed to sustaining its air services.
Earlier in the day, there were reports of PIA canceling a number of domestic and international flights due to severe cash flow problems. The airline had been grappling with financial issues for some time, and there were concerns that flight operations could be suspended by September 15 if emergency funds were not secured.
To add to the airline's financial woes, on September 7, PIA revealed that it had grounded five of its 13 leased aircraft, with the possibility of grounding four more due to the ongoing financial crunch. The airline had urgently requested a bailout of Rs22.9 billion, which was regrettably rejected by the Economic Coordination Committee (ECC).
Additionally, the ECC turned down PIA's plea for deferment of monthly payments totaling Rs1.3 billion to the Federal Board of Revenue (FBR) for Federal Excise Duty (FED) and Rs0.7 billion to the Civil Aviation Authority (CAA) for embarking charges.
Furthermore, PIA had issued a warning that Boeing and Airbus might suspend the supply of spare parts by mid-September, posing additional challenges to its operations. In the previous month, the Federal Board of Revenue of Pakistan (FBR) had taken a stringent measure by freezing 13 PIA bank accounts due to the airline's failure to pay Rs8 billion in FED. This further exacerbated the financial predicament faced by the national flag carrier.
