PIA’s Debt Reaches Rs. 185 Billion
9 months ago
The debt of Pakistan International Airlines Corporation Limited (PIACL) reached Rs. 185 billion in November 2016, as the national flag carrier is overburdened with debt with more loans taken to adjust previous loans, said Muhammad Irfan Elahi, Federal Secretary Aviation Division & Director PIACL.
He briefed the Senate Standing Committee on Cabinet Secretariat that debt was Rs. 162 billion in 2012 which increased to Rs. 185 billion in 2016; however, the latest figures of 2016 are still under audit.
He said dues payable by the PIACL to the Civil Aviation Authority are Rs. 49.162 billion, whereas it has to pay Rs. 14 billion to PSO.
As far as development work of New Islamabad International Airport is concerned, the chairman committee suggested the authorities to check if any society within the parameters of airport is in the process of development which may later on affect the operation of airlines.
Irfan Elahi told the committee that a committee comprising members of National Highway Authority (NHA), Capital Development Authority (CDA), Civil Aviation Authority (CAA) and Rawalpindi Development Authority (RDA) has been formed to verify and clear the surroundings before issuing NOC to any society and commercial buildings.
It was informed in the committee that four ATRs are still under inspection whereas only five are working.
Senator Mir Yousaf said that there is only one flight working within Balochistan.
Senator Shahi Syed said 4 ATRs were already malfunctioning and PIACL realized it after a major air crash.
The PIACL informed the committee that it is trying to increase cash inflows for which steps are being taken by the company. Following the path of fleet modernization, the company is in the process of acquiring more fuel-efficient aircraft for replacing its aged fleet.
The company is exploring various revenue enhancing strategies by adding new destinations on the network, increasing frequencies and entering into code shares and Special Prorate Agreements (SPAs) with other airlines, besides expansion of sales network. Cargo business is being improved by entering into a block space agreement on western routes.
Schedule reliability, food quality and passenger handling services are being improved to enhance corporate image in public eyes for increasing number of passengers.
The company is in advanced stage of implementation of Enterprise Resource Planning (ERP) and ancillary modules for efficient financial reporting and strong internal controls.
The steps taken by the government to settle the loan revealed that the government has appointed Dubai Islamic Bank as Financial Adviser for restructuring of the balance sheet and devising the future course of action for settling loans whereby modalities will be submitted by them.
The company’s request for cash support is with Economic Reform Unit (ERU) of Ministry of Finance for bearing interest cost of legacy burden by the government and provision of additional funds for other projects for one year.
Presently PIACL is not operating on D.I.Khan sector because of the poor passenger load and fleet constraints since it is difficult to meet the operating cost.
However, PIACl is operating two weekly flights on Karachi-Quetta-Zhob-Islamabad sector and two weekly flights between Quetta and Multan.
Compensation to Families of PKR 661
The PIACL further informed that it follows laid-down policy to complete the process of life insurance entitled to passengers and crew who die during aircraft accidents. In line with the policy, the PIACL adopted the procedure to compensate the heirs of the passengers of flight PK-661, which crashed near Havelian on 7th December 2016 and 39 revenue and 3 non-revenue passengers and 5 crew members died.
The Insurance Brokers through their lawyers have conveyed their agreement to settle the claims. The PIACL will publish an announcement in the newspapers in the mid of January 2017 condoling the tragic incident and informing the families of the deceased passengers about the payment of compensation of Rs. 5 million in compliance with the Carriage by Air Act 2012.
Letters to the family members will be dispatched after the announcement requesting them to submit the required documents (succession or guardianship certificate, CNIC, Form B etc). A basic information questionnaire will also be enclosed with the letter to be filled by the legal heirs.
The questionnaire along with the required documents will be forwarded to the insurers for releasing the funds for onwards submission to the legal heirs.