In Islamabad and Lahore, concerns have arisen regarding the fate ofPakistan International Airlines’ (PIA) nine leased planes. Leasingcompanies have declined assistance due to the airline’s financial troubles.Caretaker Prime Minister Anwaarul Haq Kakar has taken action by instructingPIA’s management to swiftly present a restructuring plan to the EconomicCoordination Committee (ECC) of the Cabinet.
Within PIA’s fleet, there are currently four Boeing 777 and five Airbus320 aircraft acquired through leasing agreements. However, financialconstraints prevent the airline from meeting its lease payments, leading toleasing companies’ reluctance to collaborate, especially with institutionsin countries with CCC credit ratings, including Pakistan.
The outstanding international payments owed by PIA amount to $100 million,encompassing aircraft and engine lease payments, international handlingfees, airport charges, and interest on loans. Additionally, the airline isrequired to pay Rs3 billion to the Federal Board of Revenue (FBR). Thesefinancial difficulties have begun affecting Boeing’s component servicesprogram and Airbus Industries’ aircraft repair support, resulting in anincrease in PIA plane incidents.
The airline’s spokesperson attributed its financial crisis to the country’seconomic situation and the negative credit rating, which hinders foreignexchange availability. While 2023 has seen positive revenue growth for PIA,the burden of interest payments remains a significant challenge.
During a meeting in Islamabad, the interim prime minister emphasized theimportance of PIA’s restructuring, enabled by recent amendments to the PIAAct, 2016. He urged the airline’s management to enhance connectivity toremote areas and align flight schedules with passenger convenience. PMKakar fondly recalled PIA’s past reputation as one of the world’s topairlines and urged the Aviation Division and PIA management to worktirelessly to restore its former glory.
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The meeting included the participation of Caretaker Finance Minister Dr.Shamshad Akhtar, advisers to the interim PM Air Marshal (retd) FarhatHussain and Ahad Cheema, and other officials.
In a noteworthy development, PIA employees ended their 26-day strike afterreceiving approval for a 20% salary increase for group 1 to 4 workers. Amemorandum of understanding was signed to formalize this agreement, markingthe successful conclusion of the employees’ “salary increase movement.”
