KARACHI: A Pakistan International Airlines (PIA) spokesperson said on Sunday that the cash-starved airline’s flight operations returned to being “smooth” again on Sunday after it secured a bank loan earlier this week, amid a severe financial crisis that prompted it to scale down operations last week.
PIA spokesperson Abdullah Khan told Arab News on Monday that 14 of the airline’s 31 aircraft were grounded primarily due to lack of funds for lease and spares support payments. The loss-making state-owned enterprise has relied heavily on successive governments and their bailout packages to function over the years, prompting the previous administration of former prime minister Shehbaz Sharif to announce in August its decision to privatize the airline. The announcement came after Pakistan agreed to fiscal discipline plans with the International Monetary Fund (IMF).
On Sept. 14, Pakistan’s Caretaker Prime Minister Anwaar-ul-Haq Kakar called on authorities in a high-level meeting to fast-track the PIA’s privatization process, underscoring the urgency of securing its long-term survival. The move came on the heels of the government’s rejection of PIA’s appeal for a whopping Rs23 billion ($76 million) bailout package.
According to a report in English daily Dawn, the national airline said it has drawn a loan of Rs17 billion. Speaking to Arab News, Khan confirmed the PIA had drawn a bank loan without disclosing its full amount.
“Loan practically is much less than that [Rs17 billion],” Khan told Arab News. “But flight operations have become smooth.”
In an earlier statement, the PIA had said it would operate 77 flights throughout various airports in the country on Sunday, including 25 domestic and 52 international flights.
The national flag carrier is facing a severe financial crunch at a time when Pakistan is in the throes of an economic crisis that saw it narrowly avoid a sovereign debt default by securing a $3 billion bailout package from the IMF in June.
The PIA, already compounded with financial issues, suffered a serious setback in March 2020 when its flights were grounded due to the coronavirus pandemic. When it resumed operations in May 2020, a domestic PIA flight crash in Karachi killed 97 out of 99 people on board, prompting an initial inquiry that pointed to a number of safety failures.
The inquiry sparked a disclosure from authorities that nearly a third of PIA’s pilots may have falsified their qualifications, prompting the European Union Aviation Safety Agency (EASA), the US Federal Aviation Administration (FAA) and other regulators to ban PIA flights, adding to the airline’s financial troubles.
Source: Arab News