KARACHI:
On Wednesday, the cash-strapped Pakistan International Airlines (PIA) had to cancel a total of 24 domestic and international flights due to a limited supply of fuel by Pakistan State Oil (PSO). Only 26 of PIA’s flights departed for their respective destinations on that day.
According to official sources, on Wednesday, PIA paid Rs150 million to PSO for fuelling these 26 flights. On Tuesday, PSO had provided fuel for only 13 PIA flights, including 10 international and 3 domestic routes, upon payment of Rs125 million.
Over the last two days, on October 17 and 18, 44 flights of the national flag carrier were cancelled, affecting approximately 6,000 passengers. Among them, 4,000 were international travellers, and 2,000 were passengers on domestic flights.
State-run PIA, long accused of being bloated and poorly managed, has seen its funds drying up as the government grapples with a balance of payments crisis caused by crippling debt repayments.
Speaking to AFP, Athar Awan, a deputy spokesman for PIA, said these flight cancellations were “due to non-availability of fuel.”
“The reason for the disruption in fuel supply is non-payment of dues because PIA is facing a financial crisis and cannot pay the dues to PSO on time,” a PIA official, speaking on condition of anonymity, told the news agency.
Decades of mismanagement and instability have hobbled Pakistan’s economy, and this year, Islamabad was forced into yet another bailout from the International Monetary Fund (IMF) to avert default.
Read also: Financial crisis takes a toll on PIA passengers
A senior official at PSO said the state-owned fuel supplier was “providing fuel only for flights that PIA has prioritized.” He, too, spoke on condition of anonymity.
This week, PIA agreed to pay the oil firm Rs100 million every day to cover its dues, the PSO official said. “On Wednesday, PSO received a payment of Rs150 million in return, and 26 flights were refuelled,” the official added.
In a statement, the airline said it expected normal service to resume from Thursday after paying for fuel “from its own resources.” The airline did not provide further details.
Bloomberg previously reported that PIA had liabilities of Rs743 billion (around $2.5 billion), exceeding its total assets by five times.
As reported by The Express Tribune on October 14, PIA has sought additional borrowing of over Rs7 billion from banks due to concerns about the potential partial or complete suspension of its flight operations resulting from a severe financial crisis.
According to the report, PIA wrote to the Aviation Division, requesting an immediate loan of over Rs7 billion from banks. The letter also noted that the government of Pakistan’s guarantee includes the option for the airline to secure a loan of Rs7.5 billion.
(With addition from AFP)
Source link: https://tribune.com.pk/story/2441791/pia-cancels-another-two-dozen-flights