Financial turmoil threatens PIA: Flight cancellations surge, salaries delayed

The Pakistan International Airline (PIA) faces an imminent crisis, as a high-ranking official from the national carrier has issued a warning that flight operations may be suspended by September 15th if emergency funding is not promptly secured. This concerning development, as reported by Geo News, underscores the severity of the situation.

In a statement to Geo News on Wednesday, a senior director at PIA highlighted that the operational fleet has dwindled from 23 to just 16 aircraft, resulting in the unfortunate cancellation of numerous flights. The dire financial straits of the airline have led to significant disruptions.

Furthermore, the official revealed that renowned aircraft manufacturers, Boeing and Airbus, have halted the supply of crucial spare parts to PIA due to outstanding payments. This disruption, coupled with reduced flight operations, has incurred substantial daily losses running into millions of rupees for the national airline.

In a distressing incident, one PIA aircraft was temporarily detained at Dammam airport, while four others faced a similar situation at Dubai airport, all due to unpaid fuel bills. These aircraft were eventually permitted to depart based on written assurances from PIA, with the International Air Transport Association (IATA) reinstating PIA services following an emergency payment of $3.5 million.

The official’s somber warning emphasized that without an injection of Rs23 billion in emergency funds, flight operations may face suspension by September 15th.

In response to this critical situation, a PIA spokesperson, in a statement, assured that exhaustive efforts were underway to avert the suspension of flight operations.

Earlier reports had indicated that PIA’s financial challenges had severely impacted its flight schedule, resulting in the cancellation of both domestic and international flights. The airline had urgently requested government intervention to provide the necessary funds, and there were also reports of unpaid salaries to PIA employees.

This financial turmoil for PIA had previously prompted the grounding of five leased aircraft, with the possibility of grounding four more due to ongoing financial constraints. The airline had sought an emergency bailout of Rs22.9 billion, which was unfortunately rejected by the Economic Coordination Committee (ECC). Additionally, the ECC declined requests for the deferment of monthly payments to the Federal Board of Revenue (FBR) and the Civil Aviation Authority (CAA).

In another setback, last month, the FBR had frozen 13 PIA bank accounts due to non-payment of Rs8 billion in Federal Excise Duty (FED), further compounding the airline’s financial woes.