According to local media reports, Pakistan International Airlines (PIA) problems have continued as the airline has been unable to raise funds to meet its jet fuel needs, forcing it to cut flights.
PIA Is on The Verge of Bankruptcy
According to the report, the airline is on the verge of bankruptcy, with more than 300 flights canceled in the last 10 days, as confirmed by the carrier’s spokesperson.
The announcement comes after reports that the airline was unable to pay for fuel as recently as last week.
A PIA spokesperson confirmed that the airline canceled 48 international and domestic flights between October 16 and October 17, 2023.
A spokesperson for Pakistan State Oil confirmed that the de facto flag carrier had a credit limit of US$53.5 million, of which US$53.34 million had already been used.
However, the national flag carrier owed PSO $95.6 million as of October 16, 2023.
Earlier this month, a body under Pakistan’s cabinet used emergency powers to hire financial advisers to plan the privatization of Pakistan International Airlines within the next four months.
The decision was made by the government as the national flag carrier faces staggering losses of US$550 million in 2023 alone. Since 2012, PIA has lost US$7.1 billion.
With the government short on funds and scrambling to put out economic fires, the International Monetary Fund is putting pressure on Pakistan to restructure loss-making state-owned enterprises like PIA under a $3 billion standby loan arrangement, according to Nikkei Asia.
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