The Pakistan International Airlines’ (PIA) financial crunch shows no signs of abating, forcing the national flag carrier to cancel over 300 flights in the past 10 days due to an inability to purchase fuel.
Earlier this month, the Pakistan State Oil (PSO) confirmed that it had cut fuel supply to the PIA over unpaid dues. As a result, the airline has cancelled 322 flights, including 134 international routes, since Oct. 14, according to its spokesman. On Tuesday alone, he told local media, 51 flights, including 27 on domestic routes, had been cancelled.
The spokesman has said the airline management is trying to accommodate passengers on alternative flights. However, in the interim, thousands have been left adrift with no idea of when, or even if, they would be able to complete journeys already scheduled with the PIA.
The crisis occurs as the government ramps up efforts to privatize PIA, with members of its staff claiming it is part of efforts to shutter it.
Last month, PIA sought a moratorium on its Rs. 260 billion domestic debt repayments to address an annual deficit of Rs. 153 billion. According to local media, it requires Rs. 3.1 billion/month to service its external debt of Rs. 109 billion and Rs. 7.5 billion/month for servicing its domestic debt of Rs. 260 billion as of the end of August. To keep the lights on, the airline obtained an additional loan of Rs. 13 billion the same month.
Overall losses of the PIA have soared to Rs. 713 billion, with Rs. 285 billion of them guaranteed by the federal government. Authorities have warned that if the airline continues to be mismanaged in the same manner, its total debt and liabilities could reach Rs. 2 trillion by 2030.
The airline has already requested the Finance Ministry to grant it Rs. 7.5 billion in budgetary support, but it has yet to approve this without a viable plan.