The government has convinced private banks to extend credit lines to the beleaguered Pakistan International Airlines, as announced by PIA’s official Twitter handle on Saturday.
These funds would be used to clear long-due payments of aircraft & engine leases, spare parts support, and handling payments at foreign stations. Restructuring of the airline is also on the cards.
Pakistan’s national flag carrier is grappling with severe financial constraints, struggling to meet interest payments let alone address the principal debt. The anticipated injection of funds is set to commence next week and the management has outlined plans to allocate funds for critical purposes.
Just three days ago, Caretaker Prime Minister Anwaar-ul-Haq emphasized the urgent need for restructuring the struggling flag carrier. The Economic Coordination Council (ECC) on Thursday constituted a separate committee to assess the restructuring plan for PIA. Once formulated, this plan will be presented to the Economic Coordination Committee for consideration.
PIA is likely to incur Rs. 112 billion in losses in CY23, up from Rs. 80 billion during the previous year. CEO Air Vice Marshal Amir Hayat stated last month that the carrier is under Rs. 742 billion of debt and the yearly losses may exceed Rs. 253 billion by 2030 while they are focusing on running it as a public-private partnership post-restructuring.
However, it’s worth noting that the future of PIA is set to remain a topic of ongoing debate. The government is facing criticism for focusing on restructuring PIA instead of privatizing it. It will face strong resistance from union leaders who believe that selling PIA would lead to deteriorating working conditions for staff and a potential decline in service standards for passengers.