Pakistan International Airlines starts partial suspension of flights amid financial crisis

Pakistan International Airlines has started partial suspension of both its domestic and international flights amid the ongoing fiscal crunch, The Express Tribune reported on Saturday.

According to the Pakistan daily, the PIA has started working on a backup plan — ‘Plan B’, which involves reducing flight operations by 15 to 25 per cent. Earlier, Pakistan’s caretaker Prime Minister Anwarul Haq Kakar asked Fawad Hasan Fawad, a member of his interim cabinet, to fast-track the privatisation process of Pakistan International Airlines (PIA), ARY News reported on Thursday.

Chairing a meeting to review the process of PIA privatisation in Islamabad on Thursday, he urged the stakeholders concerned to expedite the process keeping in view the rising standards of the national flag carrier as per international standards. Kakar directed all relevant stakeholders to find an immediate solution to the matters related to the privatisation process.

During the meeting, the Prime Minister was briefed on the progress of the privatisation process of the PIA. He also welcomed the new caretaker Privatisation Minister Fawad Hasan Fawad to his team.
On September 14, amid a major financial crisis, Pakistan International Airlines (PIA) cancelled several domestic and international flights, ARY News reported.

The flights scheduled to take off from/to the Karachi airport were cancelled after the national carrier failed to pay Pakistan State Oil (PSO) for fuel supply. The Pakistan-based media outlet reported that the cancelled flights included Karachi-Turbat, Karachi-Gwadar, Karachi-Quetta, Karachi-Sukkur and Karachi-Multan.

Earlier, the PIA grounded five out of its 13 leased aircraft with the prospect of grounding four additional planes amid the fiscal crunch and dues in lieu of fuel supply. The PIA asked for an emergency bailout of Pakistani Rupees (PKR) 22.9 billion which was then rejected by the Economic Coordination Committee (ECC).

The ECC also rejected the request made by PIA for deferment of the payments of Rs 1.3 billion per month, which the national carrier pays to FBR against FED and Rs 0.7 billion per month which it pays against the rising charges, Geo News reported.

Further, the PIA also warned that Boeing and Airbus might suspend the supply of spare parts by mid-September.

In July the Federal Board of Revenue (FBR) froze the national carrier’s account on the basis of non-payment of more than Rs 2 billion in taxes, according to ARY News.

In January, last year, the FBR froze 53 bank accounts of the PIA after it was found to have defaulted on tax payments worth Rs 26 billion. However, those bank accounts were restored after PIA assured them of an early clearance of the taxes.