Cash-strapped PIA faces action over non-payment of dues

KARACHI: In a setback for the cash-strapped national flag carrier, the Civil Aviation Authority (CAA) has restrained Pakistan International Airlines (PIA) from collecting embarkation, security and airport charges for international as well as domestic flights over non-payment of dues.

“With effect from 01st October, 2021, Passenger Related Charges (Embarkation Fees, Airport Charges, Security Charges etc.) applicable on Domestic and International departing passengers of PIA will be collected by CAA,” the country’s aviation regulator said in a letter to the airline’s chief financial officer.

The CAA warned that in case of failure to pay dues by Oct-end, PIA will be deprived of facilities such as the Common-Use Passenger Processing Systems (CUPPS), Baggage Reconciliation System (BRS), pre-conditioning facility, jet bridges and power supply for its aircraft.

The airline owed the CAA a whopping Rs127.7 billion, according to the letter.

“In the meeting held on 25th May, 2021, it was decided that M/s. PIACL shall pay amounts of Rs150 million and Rs100 million on a monthly basis with effect from May 2021 on account of dues related to Passenger Related Charges and CUPPs / BRS charges respectively,” the letter read.

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As per commitment, CAA said the airline was required to pay Rs600m on account of different charges while Rs400 million on CUPPs and BRs fees.

The letter further said: “It is highly unfortunate that out of these accounts payable, M/s. PIACL has paid only Rs500 million on account of passenger related charges and has made no payment on account of CUPPS / BRS charges till 20th September, 2021.”

“This sorry state of affairs is in the backdrop of continuous default in payment of M/s. PIACL, which now amounts to an exorbitant Rs127.7 billion as on 31st August, 2021.”