Tag: Emergency Funds

  • PIA faces flight cancellations and delays as financial crisis intensifies

    PIA faces flight cancellations and delays as financial crisis intensifies

    Pakistan International Airlines (PIA), currently grappling with severe financial challenges, has been compelled to cancel multiple domestic and international flights.

    An authoritative representative of the national flag carrier conveyed to Geo News that there’s a looming risk of suspending flight operations by September 15, today, unless urgent financial support is extended.

    This predicament initially materialised on August 12, when numerous domestic flights, both departing from and arriving in Karachi, had to be abruptly canceled. This unfortunate situation was attributed to a combination of financial constraints and the inability to settle outstanding dues owed to Pakistan State Oil (PSO) for fuel supply.

    An examination of today’s schedule at Jinnah International Airport reveals a series of disruptions in PIA’s services. Notably, flights from Karachi to Bahawalpur (PK588 and PK589) and Karachi to Lahore (PK302 and PK303) have been canceled.

    Furthermore, the Karachi to Islamabad flight (PK368) faces a three-hour delay, while the Karachi to Lahore flight (PK304) encounters an extensive delay of eight and a half hours.

    Additional disruptions include the cancellation of PIA flights between Karachi and Rahim Yar Khan (PK582 and PK583), along with delays for Karachi to Multan (PK330) and Dubai (PK213), both postponed by two hours.

    Moreover, the Islamabad to Karachi flight (PK301) has been cancelled; Islamabad to Riyadh (PK753) is running three hours behind schedule; and Lahore to Karachi (PK305) faces a delay of two and a half hours.

    PIA’s financial struggles have been escalating, with the airline revealing on September 7 that it had grounded five of its 13 leased aircraft, potentially grounding an additional four due to the ongoing financial strain. 

    A plea for an urgent bailout of Rs22.9 billion was met with rejection by the Economic Coordination Committee (ECC). The ECC also declined the request to defer payments, including Rs1.3 billion per month to the Federal Board of Revenue (FBR) for Federal Excise Duty (FED) and Rs0.7 billion per month to the Civil Aviation Authority (CAA) for embarking charges.

    Adding to the airline’s woes, PIA cautioned of possible suspensions in the supply of spare parts by Boeing and Airbus come mid-September. In the previous month, the Federal Board of Revenue of Pakistan (FBR) took the drastic step of freezing 13 PIA bank accounts due to non-payment of Rs8 billion in FED.

  • PM Kakar urges rapid privatisation of PIA as flight suspensions loom

    PM Kakar urges rapid privatisation of PIA as flight suspensions loom

    Interim Prime Minister Anwaar-ul-Haq Kakar has issued a directive to accelerate the privatisation process of Pakistan International Airlines (PIA), which has been facing substantial financial losses. This move comes in response to reports suggesting that PIA’s flight operations could be halted by September 15 unless emergency funding is secured. 

    In a recent interview with Geo News, a senior PIA director revealed that the airline had reduced its operational fleet from 23 to just 16 aircraft, resulting in numerous flight cancellations. Additionally, major aircraft manufacturers, Boeing and Airbus, had suspended the supply of spare parts to PIA due to outstanding payments, causing daily losses amounting to millions of rupees.  

    The dire situation was further exacerbated when a PIA plane was detained at Dammam airport and four others were held at Dubai airport due to unpaid fuel bills. 

    The official cautioned that unless emergency funds amounting to Rs23 billion were secured, flight operations might come to a standstill by September 15. In response to these pressing concerns, Prime Minister Kakar chaired a meeting regarding PIA-related matters and assigned the caretaker Minister for Privatisation, Fawad Hasan Fawad, to oversee the privatisation process with the utmost urgency.  

    The prime minister stressed the need for a swift privatisation process to ensure reliable services for users and to bring PIA’s standards in line with global aviation standards. 

    Furthermore, the prime minister urged all relevant stakeholders to collaborate in finding immediate solutions to the challenges associated with privatization. The meeting also included a briefing on the progress of the privatisation process at PIA. 

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    According to Geo, PIA has been grappling with severe financial difficulties, including the grounding of five out of its 13 leased aircraft, with the possibility of grounding four more due to ongoing financial constraints. The airline had previously requested an emergency bailout of Rs22.9 billion, which was rejected by the Economic Coordination Committee (ECC).  

    Additionally, requests for deferring payments of Rs1.3 billion per month to the Federal Board of Revenue (FBR) and Rs0.7 billion per month to the Civil Aviation Authority (CAA) were also denied by the ECC.  

    Moreover, PIA had warned of potential disruptions in the supply of spare parts by Boeing and Airbus by mid-September. In a further blow, the FBR froze 13 of PIA’s bank accounts due to unpaid dues totaling Rs8 billion in Federal Excise Duty (FED).