PIA’s path to recovery: Govt injects ‘critical funds’ to settle debts

ISLAMABAD: Pakistan International Airlines (PIA), grappling with its financial burdens, announced on Saturday that it has found relief as the government injected critical funds into the national carrier. In a statement shared on the social media platform X (formerly known as Twitter), PIA disclosed that the government of Pakistan has stepped in to provide vital financial support, leading to an alleviation of the airline’s fiscal challenges. Additionally, PIA affirmed that its restructuring efforts are progressing as planned.

While specific financial figures were not divulged, PIA clarified that these funds are earmarked for settling long-standing debts related to aircraft and engine leases, spares support, and handling payments at international stations.

According to the latest financial reports, PIA incurred losses amounting to Rs64 billion during the first half of 2023 (January-June). This significant loss is attributed to high administrative and financial costs, representing a substantial increase compared to the Rs43.5 billion loss recorded during the same period in the previous year.

Earlier this week, the Economic Coordination Committee (ECC) convened to address issues related to PIA. During the meeting, the Ministry of Aviation presented a summary regarding “Financial support for PIACL & its Restructuring.” The Secretary of Aviation provided a comprehensive overview of PIA’s financial burdens, liabilities, and the necessity of restructuring the organisation to the committee chair.

According to Business Recorder, the ECC engaged in a detailed discussion and evaluation of the proposed restructuring plan. Ultimately, it was decided to form a dedicated committee responsible for assessing PIA’s restructuring plan. This decision was communicated in an official statement issued following the meeting.

Furthermore, the ECC declined the request for the deferment of payments totaling Rs1.3 billion per month, which PIA remits to the Federal Board of Revenue (FBR) as federal excise duty, and an additional Rs0.7 billion per month paid to the Civil Aviation Authority (CAA) for embarking charges. It was resolved that the Finance Division and the State Bank of Pakistan will extend their support to PIA in addressing its financial challenges once a concrete restructuring plan for PIA has been finalised and gains the approval of the committee.

It’s worth noting that PIA had previously been included in the government’s privatisation program. The Privatisation Division recently provided an update on the progress of the privatisation of the Roosevelt Hotel.