Pakistan International Airlines (PIA) management has failed to convince the Economic Coordination Committee (ECC) about its business plan. ECC only approved Rs. 20 billion for engine overhauling of its Boeing 777 aircraft. In its business plan, PIA management demanded more than Rs. 100 billion for the next 5 years.
Prime Minister Shahid Khaqan Abbasi chaired the ECC meeting to approve financial needs of different projects. PIA CEO and President Musharaff Rasool Cyan presented the airline’s business plan.
During the meeting, PIA CEO failed to convince the ECC in general and PM in particular about the business plan. PM himself owns an airline and asked very tough questions and wasn’t satisfied with the responses.
PIA management presented the business plan and demanded Rs. 20 billion for the overhaul of Boeing 777 engines. Their maintenance is long overdue. The government will provide a guarantee on this and PIA will be able to obtain a loan from the banks. With this amount, PIA will be able to make its Boeing 777 aircraft airworthy which have been grounded since 2017.
“Aviation Division and the Finance Ministry will ensure that the financing support approved by the ECC is strictly utilized only for the defined purpose,” Shahid Khaqan directed.
PIA management informed ECC that under the new management PIA is now on a path of recovery. Overall sales have increased by 30 percent, they stated.
PIA management also demanded Rs. 100 billion for the next 5 years to pay interests on legacy loans. Each year, the airline pays Rs. 18 billion in terms of interest on these loans.
“These loans and their interest payments are hurting PIA’s financial condition and the airline is currently not in the position to pay these loans. If the government can take responsibility to pay the interest this will be a big relief for PIA,” Musharraf added.
PIA also presented, in its business plan, the suggestion to reduce airline employees by 50 percent. And suggested offering early retirement and Golden Hand Shake scheme to the employees who retire. But PM and ECC members asked to defer this for the next meeting.
The Economic Coordination Committee ECC has approved the financial restructuring of PIA after a detailed review of PIA’s Strategic Business Plan 2018-22.
President and CEO PIA, Musharraf Rasool Cyan sharing his views on the approval by ECC said that the efforts and hard work of PIA management is paying off and positive results are appearing in a turnaround of the airline.