- PIA is struggling to make lease payments for its nine planes due to financial difficulties.
- The interim Prime Minister orders PIA to present a restructuring plan to the ECC.
- PIA employees conclude their strike following a 20% salary increase for certain worker groups.
Interim PM Kakar Calls for Immediate PIA Restructuring Plan
KARACHI — Pakistan International Airlines (PIA) is grappling with significant financial issues, with fears mounting that its nine leased aircraft, including four Boeing 777 and five Airbus 320, might be grounded. Sources pinpointed the inability of the national airline to meet its lease payment obligations as the primary cause, a direct result of its prevailing economic woes.
These financial difficulties have been exacerbated by leasing companies’ reluctance to collaborate with entities from CCC credit-rated nations, which encompasses Pakistan. Consequently, PIA owes a staggering $100 million in international dues, which encompasses aircraft and engine lease payments, airport charges, and interest on loans. Additionally, a debt of Rs3 billion is owed to the Federal Board of Revenue (FBR).
The financial straits have impacted both Boeing's component services programme and Airbus Industries' support package, leading to a rise in PIA plane damages. In response, a PIA representative highlighted Pakistan's adverse economic landscape and the nation's poor credit rating as the major culprits behind the fiscal crisis. While the airline did register a positive revenue stream in 2023, its interest obligations continue to exert substantial financial pressure.
Addressing the situation, interim Prime Minister Anwaarul Haq Kakar convened a session in Islamabad to discuss PIA's challenges. He instructed the airline's management to swiftly present a restructuring blueprint to the Economic Coordination Committee (ECC) of the Cabinet. He emphasized the airline’s once-stellar reputation and urged the PIA and the Aviation Division to collaborate tirelessly to restore its former prestige. The meeting witnessed attendance from notable personalities, including Caretaker Finance Minister Dr Shamshad Akhtar and advisers to the interim PM.
On a positive note for PIA, after 26 days of strikes, airline employees have resumed duties. This decision followed the administration's approval of a 20% salary augmentation for group 1 to 4 personnel. PIA People's Unity CBA Union president, Hidayatullah Khan, celebrated this as the successful culmination of their "salary increase movement."
