PIA gets govt 'nod' for Rs20 bln loan from banks

KARACHI: In a significant development, cash-strapped Pakistan International Airlines (PIA) is likely to receive a fresh loan of Rs20 billion from commercial banks after the caretaker govt’s nod, ARY News reported, citing sources within the finance ministry.

Pakistan International Airlines is on the verge of a shutdown as it cancelled over 500 flights in the past 11 days due to the unavailability of fuel.

Sources said the finance ministry has ‘directed’ commercial banks to release fresh loans to Pakistan International Airlines, while the current govt’s debt is also to be ‘rescheduled’ for six months.

They further say the National Bank of Pakistan, Bank of Punjab and six other commercial banks will give fresh loans to the PIA on the guarantee. The national flag carrier has already taken a loan worth Rs260 billion from commercial banks on the government’s guarantee.

The Pakistan International Airlines loan will be rescheduled for six months until the privatization of the national entity, the sources said.

Read more: Over 500 PIA flights cancelled in 11 days

The national flag carrier is facing arguably its worst crisis in history as Pakistan State Oil (PSO) has cut the fuel supply over unpaid dues.

The move forced the airline to cancel 537 flights since Oct 13.