KARACHI: The Pakistan government has taken steps to extend financial relief to the national carrier, Pakistan International Airlines (PIA), which has been facing severe difficulties due to burdensome loans and interest payments.
The airline has reported losses of Rs 64 billion during the first six months of the ongoing calendar year, substantially higher than the Rs 43.5 billion loss reported in the same period last year. The current dismal finances stem from high administrative costs and surging debt servicing expenses.
The Economic Coordination Committee (ECC) also discussed PIA’s financial crisis and its restructuring plan for long-term viability. During the meeting, the Aviation Ministry outlined PIA’s burdens and reviewed timelines and costs involved in the restructuring plan.
According to the PIA spokesman, the government’s cooperation with banks and instructions to release funds will significantly improve PIA’s balance of payments position. The airline is expected to receive the urgently needed money by next week.
PIA has been struggling with a rising debt burden and has sought government assistance to remain financially afloat. The newly released funds will allow the airline to pay for aircraft leases, spare parts, engines maintenance and overseas operational handling expenses.
With the government intervention, PIA’s management expressed optimism that flight schedules and operations will no longer be hampered by funding woes. The financial relief comes as part of the government’s efforts to turn around loss-making state enterprises.
Copyright Business Recorder, 2023
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