Pakistan International Airlines (PIA), the national flag carrier of Pakistan, is facing financial turmoil after being denied a 23 billion Rupee (US$76M) bailout package from the country’s government. The airline had already received a 15.6 billion Rupee (US$ 188 million) support package back in May 2023.
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PIA has faced multiple legal challenges from its creditors, including aircraft lessors and airport operators, and has had assets repossessed in several jurisdictions due to lack of payment. Also, 11 of the airline’s 31 aircraft are grounded, with three in a state deemed beyond repair. PIA’s problems also extend to its operations. In 2020, the airline was banned from operating in the European Union (EU) and the United States (US) following a scandal concerning the fraudulent obtention of some of its pilots’ licenses. More recently, PIA has been rocked by repeated flight delays and issues with delivering passenger luggage on time.
In August 2023, the Pakistani government announced its intention to privatize the airline, which is expected to post a 112 billion Rupee (US$ 365 million) loss in 2023, since it is deemed to be financially unviable in its current form. The government directed PIA to secure commercial bank loans and develop a privatization plan. In order to arrange bank loans, the airline must set up a restructuring plan for the airline.
The operational areas that lead to financial losses must be reformed as part of the plan. This news comes as a blow to PIA and its employees as the airline struggles to stay afloat. It remains to be seen how the airline will fare in the coming months and years.