Summary
- Pakistan International Airlines (PIA) has clarified that it’s maintaining its flight schedules and needed payments, refuting rumors of a possible shutdown.
- The airline is facing financial troubles and has been denied a bailout by the Finance Ministry of Pakistan. It has already borrowed PKR 250 billion in bank loans.
- The airline has been directed to secure industrial loans and develop a privatization plan. The Ministry of Finance refuses to further aid the airline, pushing for a viable privatization plan and outsourcing of operations.
Pakistan’s national carrier, Pakistan International Airlines (PIA), has refuted the potential shutdown rumors by clarifying that it’s maintaining its most crucial flight schedules. The airline has been in constant financial turmoil in recent times. The carrier says that the reports of the stop of operations were baseless and that the airline is maintaining the needed payments to maintain its operations going.
The airline’s spokesperson, Abdullah Hafeez, stated to the local news that the reports of the upcoming shutdown wouldn’t have any merit. Quite the opposite, the airline is making ends meet with flight schedules and payments amid financial troubles. The airline is concentrated on its most urgent domestic and international financial obligations and worker salaries. The airline maintains flight schedules across its robust international and domestic network.
The spokesperson further said that the airline’s repute is being purposely harmed by such rumors. The PIA management has been working tirelessly to secure funding to maintain the airline running and paying worker wages. The airline has been arranging payment plans for its loans and other expenses with the banks and the federal government authorities. That, in line with the spokesperson, shows the airline’s commitment to its business activities.
Heavy losses proceed
The flag carrier of Pakistan is in dire need of bailout money as losses proceed. Earlier this month, the Finance Ministry of Pakistan denied the airline’s appeal for a PKR 23 billion ($78 million) bailout. As a substitute, the airline was directed to secure industrial loans and develop a privatization plan.
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The airline has already borrowed over PKR 250 billion ($850 million) in bank loans. The loans were approved with detailed documentation and guarantees from the Pakistan government. The airline already incurs greater than PKR 8 billion ($27 million) in interest charges on its bank loans every month.
With monthly expenses of PKR 34 billion and income of PKR 22 billion, the airline bears a monthly lack of PKR 12 billion ($40 million). PIA’s losses can grow to over PKR 300 billion ($1 billion) by the top of the last decade.
Pakistan’s Ministry of Finance has helped the airline on multiple occasions, particularly when paying interest charges to the banks and the dues to the country’s Civil Aviation Authority (CAA). Reports from Samaa TV, a news platform in Pakistan, suggest that the airline isn’t maintaining its monthly payments of over PKR 1 billion to the CAA.