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Sunday, May 26, 2024

PIA’s Financial Turbulence Eases as FBR Unfreezes Bank Accounts

PIA's financial turmoil eases as FBR unfreezes accounts, but challenges persist amid EASA scrutiny and calls for privatization.

The Federal Board of Revenue (FBR) has rescinded its decision to freeze all 28 bank accounts of Pakistan International Airline (PIA), providing much-needed relief to the financially beleaguered national carrier.

The FBR clarified that while the freeze was lifted, it doesn’t preclude the pursuit of recovery proceedings. This action followed intense negotiations between PIA and FBR, resulting in a successful resolution and the restoration of accounts after establishing a schedule for due payments.

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PIA has been grappling with a severe financial crisis, marked by the FBR’s freeze of its bank accounts and a threat from Pakistan State Oil to cut off fuel supply over outstanding dues. These issues compounded the airline’s troubles, which included flight cancellations and scrutiny from the European Union’s Aviation Safety Agency (EASA) regarding flight safety after a 2020 plane crash.

As the government considers privatization plans for the debt-laden PIA and the outsourcing of airport operations, the recent financial challenges underscore the urgency of addressing the airline’s sustainability.

Despite the reinstatement of accounts, the national flag carrier faces a precarious financial situation, adding momentum to the argument for privatizing state-owned enterprises, aligning with IMF recommendations to reduce the budget deficit.