Pakistan International Airlines risks grounding 15 planes amid financial crisis

Islamabad [Pakistan], September 12 (ANI): Pakistan International Airlines (PIA) is at risk of grounding 15 planes as it is yet to clear dues worth up to Rs 20 billion, Geo News reported. 

Moreover, over 30 flights are likely to be suspended if the planes are grounded, according to the sources. 

Delay in timely payment of the dues pertaining to fuel, Federal Excise Duty (FED) and lease payments, might lead to 15 planes being grounded.

The Ministry of Aviation said that overhauling the PIA is a “complicated” process and will take a year. However, during this time it is imperative to keep the national career operational, reported Geo News. 

Last week, the national carrier announced the “easing” of its financial challenges following the release of critical funds by the banks as a result of the Pakistan government’s support. 

“The funds shall be used to clear long-standing dues of Aircraft and engine leases, spare support and handling payments at foreign stations. Restructuring is also on track,” Pakistan International Airlines said. 

Earlier, the PIA grounded five out of its 13 leased aircraft with further prospect of grounding four additional planes due to the pending dues. 

However, the PIA asked for an emergency bailout of Pakistani Rupees (PKR) 22.9 billion which was then rejected by the Economic Coordination Committee (ECC).

Moreover, 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 PIA pays against the rising charges, Geo News reported. 

Furthermore, 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 be a tax defaulter of Rs 26 billion.

However, those bank accounts were restored after PIA assured them of early clearance of the taxes.