Pakistan’s fuel and financial crisis has severely hit the business of one of its airlines. According to a report by DAWN News, Pakistan International Airlines (PIA) is on the verge of a shutdown as cancelled 300 flights in the past 10 days due to fund issues.
The Pakistani media reported that Pakistan State Oil (PSO) has cut fuel supply over unpaid dues. As a result, the PIA cancelled 322 flights, 134 on international routes since 14 October.
Pakistan’s national carrier has been accused of being bloated and poorly run. PIA has found funds drying up as the government struggles with a balance of payments crisis caused by crippling debt repayments.
Yesterday, the PIA cancelled 51 flights, including 21 domestic flights.
The widespread cancellation of flights has put passengers in distress. A spokesperson of Pakistan International Airlines told DAWN News that the management is trying to accommodate passengers on alternative flights.
Decades of mismanagement and instability have hobbled Pakistan’s economy, and this year Islamabad was forced into yet another bailout from the International Monetary Fund (IMF) to avert default.
The interim government has said it will sell off the airline as part of a wider privatisation plan for state-run companies.
Bloomberg reported that PIA had liabilities of 743 billion rupees (around $2.5 billion), exceeding its total assets by five times.
PIA came into being in 1955 when the government nationalised a loss-making commercial airline and enjoyed rapid growth until the 1990s.
The liberalisation of the market and the launch of several private and publicly owned airlines put enormous pressure on Pakistan International Airline, resulting in years of lossmaking.
The airline’s reputation was also battered by a series of strikes, hijackings, and accidents — including the crash of an Airbus in Karachi in May 2020 that killed 97 passengers and crew.
Source: Live Mint