Saudi Arabia demands $48 m payment from PIA
to sustain Hajj Operations
The General Authority of Civil Aviation (GACA) Saudi Arabia has issued a notice to Pakistan International Airline (PIA) demanding the payment of $48 million to prevent the suspension of operations, including Hajj flights.
During the recent Economic Coordination
Committee meeting chaired by Finance Minister Ishaq Dar, it was revealed by the
Civil Aviation Authority that GACA KSA had issued the payment notice to avoid
the suspension of operations, including Hajj flights.
Over fifty thousand Hujjaj have already
traveled to KSA, and their repatriation will not commence until the outstanding
GACA payments are settled, cautioned the Civil Aviation Authority.
Additionally, the division disclosed that
on May 29, 2023, AerCap, one of PIA's lessors, seized PIA's B-777 aircraft in
Kuala Lumpur, Malaysia.
However, the aircraft was later released under a court
order after PIA made overdue payments and presented PIA receipts through the
IATA clearing House.
Sources present at the meeting stated that
Willis Leasing, another lessor, has filed a lawsuit for non-payment in a US
court. As a result, to avoid any adverse rulings, two A-320 aircraft engines
leased by them are being removed and forcibly returned.
Furthermore, Alliana insurance broker has
issued a termination notice, and if the overdue payments are not made,
insurance coverage will be suspended, leading to a complete halt in PIA
operations.
In addition, IATA issued a final warning
last week for the payment of outstanding dues amounting to $2.8 million by June
21, 2023. Non-compliance with the notice could have resulted in the suspension
of PIA's IATA membership and, consequently, flight operations.
Although the payment was made on June 23,
2023, with great difficulty, the existing cash flow problem could potentially
lead to a recurrence of such issues in the near future.
The ECC recently approved the release of
Rs. 4 billion to address pending claims amounting to Rs. 22 billion on account
of markup up to June 2023. However, if the cash flow problem persists, PIA's
flight operations may face suspension in the coming days.
To address the challenges, Prime Minister Shehbaz Sharif has constituted a high-level committee chaired by Ishaq Dar to develop a plan for the restructuring, reformation, and revival of PIA. The committee will include Railways and Aviation Minister Khawaja Saad Rafiq, Planning Minister Ahsan Iqbal, Commerce Minister Syed Naveed Qamar, Special Assistant to the PM Jahanzeb Khan, and the Secretary of Aviation.
Source: Pro Pakistani