PSO’s refusal to supply fuel forces PIA to cancel 14
flights
Pakistan State Oil (PSO) has halted fuel supply to Pakistan
International Airlines (PIA) at Multan, Sukkur, and Gilgit airports due to
unpaid dues, further exacerbating the national flag carrier's already
precarious situation.
The suspension of fuel supply on Monday resulted in the
cancellation of 14 flights connecting Multan, Karachi, Sukkur, Islamabad, and
Gilgit. According to sources, PIA has an outstanding debt of Rs650 million to
PSO, as per the agreed schedule.
PSO
stops supplying aircraft fuel to PIA once again
According to some media reports, PIA has sought additional
borrowing of over Rs7 billion from banks due to concerns about potential
partial or complete suspension of its flight operations resulting from a severe
financial crisis.
The report also mentioned that PIA had written to the
Aviation Division, requesting an immediate loan of over Rs7 billion from banks.
The letter highlighted that the government of Pakistan's guarantee included the
option for the airline to secure a loan of Rs7.5 billion.
However, no bank has expressed interest in providing a loan
to the airline.
PIA
faces flight disruptions as five aircraft grounded
The letter also noted that, due to financial difficulties,
fuel supply had been disrupted in Jeddah and Dubai, and the state-owned oil
marketing company PSO had refused to supply fuel to the airline.
Additionally, it raised concerns about the International Air
Transport Association (IATA) potentially suspending PIA's membership at any
time, while the Federal Board of Revenue (FBR) had issued notices to the
airline.
The letter, sent by the General Manager of Funds Management
to the Deputy Director Division, urged the Ministry of Finance to intervene
immediately and instruct banks to provide a loan of Rs7.5 billion under the
government's guarantee.
Last month, on September 22, the caretaker privatization
minister had announced that the government would not ground PIA, even though it
was the most loss-making enterprise, and no employees would be laid off, even
after privatization.
Committee
established to expedite privatization of Pakistan International Airlines (PIA)
These statements were made shortly after interim Finance
Minister Dr. Shamshad Akhtar expressed the government's commitment to support
PIA to keep it operational.
According to a report, these two separate statements seemed
to be aimed at appeasing lobbies working to save the airline, despite its
severe financial crisis.
Minister for Privatization Fawad Hassan Fawad stated,
"The prime minister has instructed me that PIA would not be grounded. We
have already worked out a way to keep PIA flying." He made these remarks
in response to a question during a press conference.
Previously, PIA had requested a moratorium on repaying its
domestic debt to bridge an annual deficit of Rs153 billion between its sales
and essential expenses.
PIA management and the Ministry of Finance had been in
discussions regarding restructuring the airline's domestic debt of about Rs260
billion, owed to nine commercial banks. Fawad stated that he was reviewing a
plan shared by PIA and had not yet made a decision.
PIA's plan involves debt restructuring, withholding tax
payments to the FBR, not paying fees and charges to the Civil Aviation
Authority (CAA), and not making any improvements to its administrative affairs.
Dr. Shamshad Akhtar commented on the same day during a
separate press conference, saying, "We will have to support PIA, as the
government holds a 92% stake in the airline. If necessary, the government will
also restructure PIA's debt, but the final decision will be made by the
privatization minister."
Source: Express Tribune