PIA Owes Rs. 67 Billion to CAA

The Civil Aviation Authority (CIA) has accumulated dues against Pakistan International Airlines Corporation Limited (PIACL) to the tune of Rs. 67.236 billion.

The Aviation Division revealed that their internal control mechanism has been strengthened. A number of measures have been taken for automation of aeronautical billing system like an e-billing system and so on.

Due to all above efforts, recovery of CAA aeronautical division’s outstanding dues was more than 99%, except for those owed by PIACL.

As per directive of CAA Board, the issue of non-payment of CAA’s outstanding dues, payable by PIACL, has been taken up with Prime Minister of Pakistan for prompt resolution of the matter and to avoid financial collapse of CAA.

Various special committees under Public Account Committee (PAC) and Senate Standing Committee also intervened in the matter but the issue could not be resolved.

The remaining amount of 0.10% of other airlines for the year 2016-17 is under reconciliation/recovery process.

Furthermore, the Division has revealed that by 31-12-2016, total loss suffered by PIA were Rs. 45.38 billion. Year 2017’s accounts are in closing/finalization stage and it will be declared after the finalization of accounts.

The following are some of the major reasons for the losses suffered by PIA:

During 2013-14, the fuel prices were very high, rising to above US$100/Barrel
After the shortage of aircraft in PIA fleet, aircraft have been obtained on lease (wet lease/dry lease) from different countries and companies. Payment of monthly installments of the leased aircraft is also a major reason for an increase in financial losses.
Navigation and other expenses rose at a high rate
In 2015, the salary of PIA employees was increased
In 2016, due to PIA employees’ strike against the privatization of PIA, flight operations were suspended which had a major impact on the financial position of PIA, as many flights were cancelled