PIA financial crisis: International authorities reject collaboration
- By Salah Uddin -
- Sep 02, 2023
KARACHI: Due to the country’s negative credit rating and dependence on the State Bank for foreign exchange, international organizations refused to go along with Pakistan International Airlines (PIA), ARY News reported on Saturday.
Due to the lack of attention from the coalition government, the national flag carrier is grappling with one of the most severe financial crises in history.
According to the sources, PIA’s four Boeing 777 and five Airbus 320 aircraft are feared to be grounded due to its inability to meet financial obligations. Leasing companies have declined to collaborate with PIA, citing concerns about the country’s CCC credit rating.
International institutions believe that PIA’s risk exposure has increased due to delays in lease payments, and they are concerned that PIA may need approval from the state-owned bank – State Bank of Pakistan – for its international financial transactions, which could erode confidence in the national airline.
Furthermore, the fate of PIA’s restructuring plan, announced by the previous government but left unimplemented, remains uncertain.
The coalition government’s lack of attention to this precarious situation has exacerbated PIA’s financial woes, leaving it struggling to meet its financial commitments, including critical payments.
It is worth mentioning here that Pakistan International Airlines (PIA) has made appointments of staff in the United Kingdom (UK) despite facing a severe financial crisis.
The national flag carrier is facing a ban in direct flights to the United Kingdom (UK) for three years. Despite the financial crisis and the ban, the national airline appointed officers and staffers on high salaries.
It was learnt that the PIA country manager will receive a salary worth £70,000, whereas, the annual salary of the passenger sales manager was fixed at £55,000 and £55,000 for the finance manager.
Additionally, a manager was appointed at the Manchester station on an annual salary worth £55,000 with other perks.