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Wednesday, May 22, 2024

PIA receives Rs 1 Billion from CAA amid financial woes

In an official statement, the spokesperson affirmed that PIA continues to meet its essential domestic and international financial obligations, emphasizing that all flight operations are running smoothly.

The financial struggles of Pakistan’s national carrier, Pakistan International Airlines (PIA), have prompted the Civil Aviation Authority (CAA) to provide a lifeline of one billion rupees to help clear the airline’s staff salaries.

Sources familiar with the situation disclosed that this payment has enabled PIA to settle its employees’ salaries up to August. However, the airline’s financial predicament remains a pressing issue, which has recently led to the grounding of aircraft.

Additionally, PIA secured crucial funding of Rs 18 billion in bank loans on Friday to avert the suspension of its flight operations. PIA’s spokesperson, Abdullah Khan, confirmed this development, stating that the loan was used to settle essential dues.

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In an official statement, the spokesperson affirmed that PIA continues to meet its essential domestic and international financial obligations, emphasizing that all flight operations are running smoothly.

The once-promising national carrier has faced escalating challenges and setbacks. It was on the verge of grounding 15 aircraft, further reducing its operational fleet. The supply of spare parts to PIA had also been at risk of suspension due to cash flow problems.

The Economic Coordination Committee (ECC) previously deliberated on the challenges confronting PIA, which has endured prolonged financial losses. During the meeting, a separate committee was proposed to assess the airline’s restructuring plan. However, the committee rejected PIA’s request for Rs 22.9 billion in financial assistance, deferment of Rs 1.3 billion monthly payments to the Federal Bureau of Revenue (FBR), and loans, along with the associated markup amounts, until the restructuring plan’s finalization.

The secretary of Aviation provided a comprehensive overview of PIA’s financial burdens and liabilities, emphasizing the necessity of restructuring the state-owned enterprise. Subsequently, it was decided that the Finance Division and the State Bank of Pakistan would support PIA in addressing its financial challenges once a concrete restructuring plan was formulated and approved.

The economic viability of the national carrier has been a subject of debate, with calls for privatization due to its financial struggles. Past discussions have explored the possibility of privatizing PIA to ensure its sustainability.

These developments underscore the critical financial situation faced by PIA and the measures being taken to stabilize the airline’s operations and financial health.