ISLAMABAD: Pakistan International Airlines (PIA) has started scaling down flight operations amid a major financial crunch, reported an international news outlet on Wednesday, while seeking a government bailout to clear mounting debts and unpaid bills.
Pakistani authorities have frequently released huge chunks of money in the past to help the debt-ridden state-owned enterprise meet its operational expenses. However, PIA has continued to rack up billion of rupees in arrears and losses over the years.
The previous Pakistani administration of Prime Minister Shehbaz Sharif said it wanted to privatize the airline, while the caretaker government of the country has instructed relevant authorities last week to finalize its restructuring plan.
The current administration also turned down PIA’s request for a Rs23 billion ($76 million) bailout package to help ease off its financial crisis.
“State-owned Pakistan International Airlines Corp. must pay at least $100 million immediately to about half a dozen leasing firms it has engaged for chartering aircraft, airport authorities, aircraft spares and others,” Bloomberg, an international media outlet that delivers business news, said. “PIA also hasn’t been able to pay salaries or airport charges.”
“Pakistan’s flag carrier has begun scaling back its operations as unpaid bills rack up and lessors block the carrier from flying their aircraft unless it makes overdue payments,” it added.
PIA made its request for a financial bailout at a time when the country is facing an economic crisis and avoided sovereign debt default by getting a $3 billion loan approved by the International Monetary Fund.
Last week, Pakistan’s Economic Coordination Committee (ECC) asked the Finance Division and the State Bank of Pakistan, but only after a restructuring plan was finalized and approved.
Meanwhile, the country’s airline continues to struggle to stay financially afloat.