PIA Facing Financial Crisis

Web DeskAugust 10, 2023
PIA Facing Financial Crisis

Pakistan International Airlines (PIA) CEO, Air Vice Marshal Amir Hayat, announced on Wednesday that the national carrier was projected to incur a loss of Rs112 billion during the current year. In a press conference, the CEO highlighted that PIA had suffered a total loss of Rs80 billion in 2022 due to existing loans and interest payments. He further revealed that the airline carried a debt burden of Rs742 billion, which had been inherited by the present management.

The CEO emphasized that without a restructuring effort, the airline’s annual losses could escalate to Rs259 billion by 2030. To address this, PIA is in the process of hiring a financial advisor for the restructuring process, with a defined roadmap in place. The CEO asserted that transforming PIA into a profitable and globally competitive entity was contingent upon a public-private partnership model.

Read more : PIA flights to the UK to resume in October

Detailing recent improvements, the CEO stated that significant operational reforms had been implemented. The acquisition of four modern Airbus 320 aircraft and the refurbishment of two long-serving Boeing 777 planes were highlighted. Additionally, the repair of an ATR aircraft for the Pakistan Navy was completed, while seats on 11 out of 14 Airbus planes were replaced. Efforts were underway to complete the remaining three planes’ upgrades within the coming weeks, ensuring timely departures with a 75% punctuality rate.

The CEO also shared that PIA collaborated with Turkish Airlines through a codeshare agreement, operating six weekly flights to Istanbul. Corporate partnerships and co-branding boosted revenue, exceeding the initial Rs20 million target by 81%, reaching Rs500 million. Notably, PIA successfully cleared audits by the European Union Aviation Safety Agency (EASA) and the UK Department for Transport.

Meanwhile, the Director General of the Civil Aviation Authority (CAA), Khaqan Murtaza, highlighted the federal cabinet’s approval of the National Aviation Policy 2023. The formation of consumer protection and on-site aviation committees was announced, facilitating air services and tourism licenses. The CAA’s division was aligned with the International Civil Aviation Organisation’s (ICAO) recommendations, with the president’s approval for CAA and Pakistan Airports Authority rules. Notably, safety concerns addressed by ICAO, EASA, and the UK Department for Transport were satisfactorily met. Murtaza stated that the Islamabad airport would be outsourced in the first phase of this reorganization. The CAA DG anticipated the launch of direct flights by the end of September.

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