PIA financial crisis: Progress made on another ‘bailout package’

KARACHI: The caretaker government has made progress on awarding another ‘bailout package’ for the national flag carrier Pakistan International Airlines (PIA) which is going through a severe financial crisis, ARY News reported on Wednesday.

Sources told ARY News that talks were held between the officials of the finance ministry, commercial banks and the PIA. The national airline is expected to get Rs7.5 billion from commercial banks on the government guarantee.

Sources added that the final decision would be made in two to three days. The progress was made after three commercial banks stepped back from disbursing loans to the PIA management after a conditional agreement.

Related: PM Kakar orders expediting PIA’s privatisation process

The PIA management would be able to timely disburse salaries of its employees after acquiring the loan, whereas, it would also balance the fuel payments to the Pakistan State Oil (PSO).

Sources said that the airline management would be more focused on implementing its ‘Plan B’ after acquiring the loan. The PIA management decided to increase international flights and specific routes for generating more revenue.

Currently, the airline is facing difficulties in refunds and the new ‘bailout package’ would help PIA to curb its financial hardships.

49 PIA flights cancelled

The restrictions on fuel supply owing to non-payment of dues continued to affect Pakistan International Airlines (PIA) flight operations as another 49 flights were cancelled today.

As many as 49 domestic and international flights have been cancelled from Karachi, Lahore, Islamabad, Quetta, Multan, Peshawar and other cities after the Pakistan State Oil (PSO) slashed its fuel supply to the PIA, sources said.

Related: PIA paid Rs220m to PSO for two-day fuel supply

The international front also saw cancellations, with flight PK 242 from Dammam to Karachi and flights PK 322 and PK 323 from Lahore to Quetta being impacted.

Further disruptions were witnessed on international routes. Flights from Islamabad to Dubai (PK 233, PK 211), Abu Dhabi (PK 261, PK 262), Gilgit (PK 601, PK 602, PK 605, PK 606), and Quetta (PK 325 and PK 326) were among those cancelled.

Similarly, Islamabad flights to Skardu (PK 451 and PK 452) and Gilgit (PK 605 and PK 606) were unable to take off, along with services to Sukkur (PK 631 and PK 632).

Even flight PK 288 from Doha to Islamabad had to be cancelled, causing significant disruption to international travel.

The spokesman said the management was trying to accommodate passengers on alternative flights and apologised for the problems caused by the cancellations.

According to the agreement that was signed between PIA and PSO, the national airline was bound to pay Rs 100 million per day but they paid Rs 70 million.