Pakistan International Airlines’ turmoil continues, as it cancels more flights due to unpaid fuel bills. Pakistan International Airlines’ troubles have continued as the airline was not able to come up with funds to pay for its jet fuel needs, forcing it to cut flights, according to local media reports by Dawn. The report added that the airline is close to completely shutting down, with more than 300 flights being canceled in the past 10 days, as confirmed by the carrier’s spokesperson.
Turbulence continues
The news follows reports that the airline, also known as PIA, has been unable to pay for fuel as recently as last week. PIA’s spokesperson confirmed that between October 16 and October 17, 2023, the airline canceled 48 international and domestic services. A Pakistan State Oil spokesperson confirmed to Profit by Pakistan Today that the de facto flag carrier had a credit limit of Rs15 billion ($53.5 million), Rs14.95 billion ($53.34 million) was already used up. As of October 16, 2023, PIA owed PSO Rs26.8 billion ($95.6 million).
Looking at Flightradar24 schedules, Pakistan International Airlines has continued to operate on some routes, for example, between Islamabad International Airport (ISB) and Istanbul Airport (IST), as well as between ISB, Karachi Jinnah International Airport (KHI), Lahore Allama Iqbal International Airport (LHE) and Toronto Pearson International Airport (YYZ). However, on other international routes, such as between ISB and Sharjah International Airport (SHJ), the airline has canceled three flights in the past seven days as of October 25, 2023.
Furthermore, it has not flown between Multan International Airport (MUX) and SHJ since October 11, while also operating just a single flight out of five from Peshawar Bacha Khan International Airport (PEW) to SHJ.
Notably, neither the United States (US) Federal Aviation Administration (FAA) nor the European Union Aviation Safety Agency (EASA) has listed Pakistan as an approved operator.
The FAA’s International Aviation Safety Assessment (IASA) program’s list does not include Pakistan – the FAA has begun removing countries for inactivity since March 8, 2013 – while EASA’s authorized Third Country Operators (TCO) list does not include any Pakistan-based airlines. In June 2020, EASA banned PIA from operating flights to Europe amidst a fake pilot license scandal.
Looming privatization
Meanwhile, the Pakistani government has looked to privatize the loss-making airline, looking for potential suitors to take over PIA. In mid-September 2023, the Pakistani Ministry of Privatization announced that it held “an important meeting regarding PIA in Islamabad”, following which the stakeholders set out,
“Clear timelines regarding the process were agreed with a view to meet the target set by the Prime Minister and the Cabinet.”
However, Pakistan is heading into election season, as the country’s president, Arif Alvi, dissolved the country’s National Assembly in August. The Election Commission of Pakistan (ECP) announced that it would hold a general election in January 2024, delaying them by around three months.
This could complicate the situation of PIA, as investors could be unwilling to invest in a flag carrier of a country whose political and economic situation is in turmoil. According to the latest overview of Pakistan by the World Bank, the confidence and activity of the country’s economy “has collapsed due to import controls, periodic exchange rate fixing, creditworthiness downgrades, and ballooning interest payments.”
According to its H1 2023 report, Pakistan International Airlines posted a net loss of Rs61.1 billion ($220.9 million), despite posting a positive operating result of Rs11.2 billion ($40.5 billion). The airline’s results showed that it had a net exchange loss of Rs27.4 billion ($99.1 million).
By Mian Saeed Ahmed Khan