PIA Crisis is being Addressed in Talks
PIA is in the midst of a crisis and talks have begun to bring it out. Discussions are underway between the government and representatives of commercial banks to prepare a plan to bail out Pakistan’s national airline from the crisis. The aim of the talks is to keep PIA operational with limited flights for another six months.
Ministry of Privatization
According to the sources of the Ministry of Privatization of Pakistan, the appointed committee has held two consecutive meetings in this regard. This 12-member committee consists of an equal number of representatives of the federal government and commercial banks. The committee has task with finalizing the new loan structure to PIA. It has ask to submit its proposals within two weeks. Usman Bajwa, the new secretary of the Privatization Commission, has been made the convener of the committee. The committee includes representatives of the Ministry of Finance, PIA, and six commercial banks. These six banks have provided loans to PIA totaling Rs 230 billion till the end of August.
According to reports publish in the Pakistani media, the committee has also been task with preparing a plan for an immediate loan of Rs 15 billion from PIA to meet its immediate needs, including fuel costs. According to sources, the monthly cost of fuel to keep PIA’s existing routes operational is estimate at Rs 8.5 billion.
The total loss of PIA is 713 billion rupees
According to reports, PIA’s total deficit has reach Rs 713 billion, of which Rs 285 billion of loans have been directly guarantee by the federal government. This does not include the amount that PIA’s subsidiaries have taken as debt. The PIA management says that in the base case, the debt and liabilities of national airlines will reach Rs 2 trillion by 2030. Its annual deficit will increase to 259 billion rupees. Commercial banks are reluctant to extend new loans to loss-making PIAs.
Sources in PIA say that it urgently needs Rs 15 billion to remain operational and talks are underway to secure the necessary funds. Currently, efforts are made to keep PIA operational with limit flights for at least another six months.
More than 300 flights canceled in the last ten days
Meanwhile, a Pakistan International Airline spokesperson said that more than 300 flights have cancel in the last ten days due to the non-availability of fuel. Pakistan State Oil has cut fuel supply due to non-payment of dues. Due to this, Pakistan International Airline was force to cancel 322 flights including 134 on international routes from October 14. A Pakistan International Airline spokesperson said that 51 flights, including 27 domestic flights, were cancel on Tuesday as well. Due to such massive cancellations of flights, thousands of passengers are facing a lot of problems. Analysts say that the unprofessional management of Pakistan International Airline is the cause of the worst crisis in the history of the national airline.
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