Pakistan International Airlines (PIA) has announced the temporary grounding of some of its aircraft, assuring the public that these planes would return to service once outstanding payments were resolved, Dawn.com reported.
Earlier in the week, reports emerged that PIA had been forced to ground multiple aircraft due to financial difficulties in securing funds necessary to sustain its operations over the coming months. The Ministry of Aviation issued a stern warning, highlighting PIA's severe cash flow crisis, resulting in overdue payments to creditors, aircraft lessors, fuel suppliers, insurers, international and domestic airport operators, and the International Air Transport Association (IATA).
As a result, the national flag carrier had no choice but to ground five out of its 13 leased aircraft, with the potential of four more facing a similar fate, according to the ministry.
Furthermore, the Ministry of Aviation disclosed that Boeing and Airbus were nearing a suspension of spare parts supply by mid-September. In light of these challenges, the ministry urgently requested an injection of Rs 23 billion and the suspension of duties, taxes, and service charges to domestic agencies. However, this request was made without a comprehensive and feasible business plan.
The ministry stressed that PIA's restructuring would be a complex process expected to span approximately eight months. They emphasized that for the divestment of PIA's shares to yield a fair value, the airline must remain operational throughout all stages of restructuring.
A recent report from Bloomberg quoted PIA's spokesperson, Abdullah Khan, as saying that the airline had been forced to cancel numerous domestic and international flights after grounding at least five Airbus A320 jets. Khan explained that PIA needed to make an immediate payment of at least $100 million to several leasing firms, airport authorities, and suppliers.
According to Bloomberg's data, PIA's liabilities have surged to Rs743 billion or $2.5 billion, exceeding its total assets by five times.
Talking to Dawn.com, Khan acknowledged that some leased planes had been temporarily grounded but assured that they would be back in operation once payments were settled. He cited challenges, including blocked funds since December 2022 and foreign exchange conversion issues affecting lease payments, airport handling fees, and component support programs.
Responding to concerns regarding PIA's potential collapse and flight suspensions, Khan clarified that while the situation was challenging, the airline was not on the brink of closure. He refuted claims that flight operations could be suspended by September 15, assuring the public that PIA was committed to overcoming these obstacles.
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