PIA averts suspension of flight operations after securing Rs18 billion bank loans

National flag carrier uses loan to clear its dues and pay salaries of its staff

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A Pakistan International Airlines (PIA) plane prepares to take off at Alama Iqbal International Airport in Lahore on February 1, 2012. — Reuters
A Pakistan International Airlines (PIA) plane prepares to take off at Alama Iqbal International Airport in Lahore on February 1, 2012. — Reuters

  • Flag carrier uses loan to clear its dues, pay salaries of its staff.
  • State-owned airlines was facing serious cash flow problems.
  • Issues had led to cancellation of domestic, international flights.


KARACHI: The Pakistan International Airlines (PIA) obtained Rs18 billion of funds through bank loans and averted a suspension of flight operations.

“The PIA has obtained a loan of Rs18 billion from two banks which was used to clear the necessary dues,” PIA Spokesperson Abdullah Khan told Geo News.

Separately, the spokesperson, in a statement, also said that the national flag carrier is making the most necessary domestic and international payments. He added the PIA has also paid all of its staff’s salaries.

Khan also added that the PIA operations are in full flow and all flights are being operated.

The spokesman further said that the national airline is established on a strong foundation and has full capacity to cope with difficult situations. “The PIA has a strong network worldwide. The PIA has an adequate number of aircraft for international and domestic flights through which air operations are ongoing."

Earlier today, it was reported that PIA, which was facing serious cash flow problems, cancelled several domestic and international flights.

A top official of the national flag carrier had told Geo News that flight operations are feared to be suspended by September 15 (today) if emergency funds were not provided.

PIA's financial woes

On September 7, the PIA had said it grounded five out of its 13 leased aircraft with further prospect of grounding four additional planes due to the prevailing financial crunch.

The PIA had asked for an emergency bailout of Rs22.9 billion which was rejected by the Economic Coordination Committee (ECC).

The ECC also rejected the request for deferment of the payments of Rs1.3 billion per month, which PIA pays to FBR against FED and Rs0.7 billion per month which PIA pays to the Civil Aviation Authority (CAA) against embarking charges.

The airline had also warned that Boeing and Airbus might suspend the supply of spare parts by mid-September.

Last month, the Federal Board of Revenue of Pakistan (FBR) froze 13 PIA bank accounts due to non-payment of Rs8 billion in FED.