Tuesday, February 27, 2024

Pakistan International Airlines privatization plan fails due to its financial obligations

by Asian News International

Islamabad [Pakistan], December 28 (ANI): The privatisation plan of Pakistan International Airlines (PIA) has faced setbacks for the upcoming year as the privatisation commission couldn’t resolve issues related to loan repayments and legal matters, ARY News reported on Thursday.

It reported citing sources that the interim federal minister for privatisation, Fawad Hussain Fawad failed to implement to transfer of PIA to the private sector by January 2024.

PIA has borrowed more than Pakistan rupee (PKR) 270 billion from the commercial banks on government guarantee.

The Ministry of Finance will decide to meet the financial requirements of the PIA for the next three months.

Sources suggest that PIA cannot afford to pay more than PKR 8 billion in interest on the PKR 260 billion loan. The commercial banks involved in lending to PIA include the National Bank and Bank of Punjab, along with eight other commercial banks.

The decision to reschedule government loans until the privatization of PIA could not be finalized. The Ministry of Finance will establish a committee to decide on the financial requirements of PIA.

Sources told ARY News that the PIA’s financial affairs will be handed over to the Privatisation Commission as the latter would take measures to reduce its losses.

Sources further claimed that the commission will link the national carrier’s financial affairs with the latest system. By improving PIA’s financial affairs, the commission will improve its balance sheet – which will help in the carrier’s privatisation.

Earlier, The Express Tribune reported that the employees of airlines Pakistan International Airlines (PIA) have been affected due to the ongoing financial upheaval faced by the airlines which has left its 7,000 employees without salaries in November.

The airline’s CBA union president, Hidayatullah Khan, addressed the issue and alleged intentional salary delays by the PIA management.

Earlier in October, the financially-crippled airline was forced to cancel numerous domestic and international flights due to limited fuel supply from Pakistan State Oil (PSO), inconveniencing thousands of passengers, reported The Express Tribune.

The national flag carrier PIA has been criticised for inefficiency and has faced dwindling funds amidst the government’s battle with a balance of payments crisis arising from immense debt repayments.

According to recent reports, the PIA’s liabilities are Pakistani Rupee (PKR) 743 billion (approximately USD 2.5 billion), surpassing its total assets by five times.

Moreover, on October 14, PIA sought an additional loan of over PKR 7 billion from banks due to concerns about potential disruptions, partially or completely, as reported by The Express Tribune.

Later, PIA in a letter to the Aviation Division, requested an immediate loan of over Rs 7 billion from banks, with the Pakistan government guaranteeing an option for the airline to secure a loan of Rs 7.5 billion, The Express Tribune reported. (ANI)

Asian News International

You may also like

Khalsa Vox

Khalsa Vox is a new-age online digest that brings to you the latest in Punjab politics, history, culture, heritage and more.

Latest Stories

Khalsa Vox, All Right Reserved.