Saudi Arabia’s General Authority of Civil Aviation (GACA) has issued a warning to Pakistan International Airlines (PIA) demanding $48 million in order to avert the suspension of operations, including Hajj flights.
This was revealed at a recent meeting of the Economic Coordination Committee, which was chaired by Finance Minister Ishaq Dar.
The Civil Aviation Authority informed members that GACA KSA has issued a notice for $48 million in order to avert the suspension of operations, including Hajj flights.
Over 50,000 Hujjaj have already been to KSA, and their repatriation will not begin until GACA payments are received, according to the Civil Aviation Authority.
Similarly, the division said that on May 29, 2023, AerCap, one of PIA’s lessors, impounded PIA’s B-777 aircraft in Kuala Lumpur, Malaysia, which was later freed under court order after making delayed payment and arguing PIA receipts through IATA clearing House.
Another lessor, Willis Leasing, has also filed a complaint for nonpayment in a US court, and in order to avoid an adverse verdict, two A-320 aircraft engines rented by them are being removed and forced returned to them, according to sources present at the meeting.
Meanwhile, Alliana’s insurance broker has issued a termination notice, and if delayed payments are not made, insurance would be unavailable, causing PIA activities to be suspended entirely.
Furthermore, IATA issued a final warning last week for PIA to pay its outstanding dues of $2.8 million by June 21, 2023; failing to comply with the notification might have resulted in the suspension of PIA’s IATA membership and consequently flying operations.
This payment was made with much effort on June 23, 2023; but, if the current cash flow problem persists, this situation is likely to resurface in the near future.
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The ECC recently granted the release of Rs. 4 billion against the demand of Rs. 22 billion in pending claims for markup up to June 2023, implying that PIA flight operations may be terminated in the next days.
On Wednesday, Prime Minister Shehbaz Sharif also formed a high-level committee chaired by Ishaq Dar to work out the restructuring, reformation, and revival of the PIA.
Railways and Aviation Minister Khawaja Saad Rafiq, Planning Minister Ahsan Iqbal, Commerce Minister Syed Naveed Qamar, Special Assistant to the Prime Minister Jahanzeb Khan, and Secretary Aviation would also serve on the committee.
The body would discuss on several alternatives for reforming and revitalising the PIA.
The aviation minister briefed the prime minister on the proposed route map and reformative measures for the national flag carrier’s improvement. The premier praised the minister’s efforts to revitalise the PIA.
