Tag: Ministry of Aviation

  • Pakistan’s Civil Aviation Authority is dividing into two entities

    Pakistan’s Civil Aviation Authority is dividing into two entities

    A specialised committee consisting of nine members has been established to supervise the division of the Pakistan Civil Aviation Authority (CAA).

    Heading this committee is Shazia Rizvi, who holds the position of Joint Secretary II within the Ministry of Aviation. Assisting her as the committee’s deputy is Vice Air Marshal Taimoor Iqbal.

    As per the official notification, Vice Air Marshal Taimoor Iqbal will serve as the committee’s deputy. The committee will also include other distinguished members, namely Asif Iqbal, the Joint Secretary of the Ministry of Aviation; Abdul Malik from the Ministry of Finance; and Nadir Shafiq, the Deputy Director General of Regulatory CAA.

    In addition to the aforementioned members, Commodore Mirza Aamir, President of the Aircraft Accident Investigation Board; Saqib Butt, Director of Finance at CAA; Sameer Saeed, responsible for Aviation Security; Sadiqul Rahman, Director of APS; and Abid Ali Shah, Director of HR at CAA, will also be integral parts of this committee.

    The committee has been allocated a deadline of October 15th to carry out its assigned tasks. The primary objective of this restructuring initiative is to bifurcate the CAA into two distinct entities, namely the Pakistan Airport Authority (PAA) and the Bureau of Air Safety Investigation (BASI).

    In addition to the creation of these new entities, the committee holds the vital responsibility of seamlessly transferring assets, funds, personnel, records, and equipment between them.

  • From ‘great people to fly with’ to ‘great debt to deal with’: PIA expected to ground several aircraft

    From ‘great people to fly with’ to ‘great debt to deal with’: PIA expected to ground several aircraft

    Pakistan International Airlines (PIA) is facing a critical financial crisis, prompting the grounding of several aircraft due to difficulties in securing funds. This crisis has resulted in arrears with various stakeholders, including creditors, aircraft lessors, fuel suppliers, insurers, and airport operators. Boeing and Airbus are also on the verge of discontinuing spare parts supply by mid-September.

    The Ministry of Aviation has urgently requested a cash injection of Rs23 billion and the suspension of duties, taxes, and service charges, although no concrete business plan has been presented. The restructuring of PIA is expected to be a complex eight-month process, and the airline must remain operational during this period for divestment to yield a fair value.

    Regrettably, PIA serves only a small fraction of Pakistan’s population while consuming significant public funds. The government, holding a 92 per cent share in PIA, faces mounting losses attributed to competition, mismanagement, and inadequate funding for fleet expansion.

    As of December 31, 2022, PIA’s debt and liabilities stood at Rs743 billion, five times more than its assets’ total value. The airline’s annual losses reached Rs86.5 billion for the last financial year, with projections indicating debt and losses could further rise.

    According to Dawn, previous attempts to make PIA sustainable through cost-cutting and fleet expansion have failed. Alternately, efforts focused on financial, legal, and operational restructuring to attract private investment have been explored but not implemented.

    In June 2023, a decision was made to restructure PIA based on the Dubai Islamic Bank Consortium Report. This involves creating a new holding company to retain legacy loans and non-aviation assets while keeping PIACL subsidiaries intact. Recent legal restrictions hindering private investment have been lifted.

    However, the restructuring plan is pending government approval. The Aviation Division has requested Rs23 billion in funds and relief from various financial obligations. A separate panel has been formed to assess the restructuring plan, with support from the finance ministry and the State Bank of Pakistan expected once the plan is fully finalised.