Pakistan International Airlines (PIA) is on the verge of collapse as the national flag carrier is facing severe cash crunch and has “temporarily” grounded some of its planes, with a number of domestic and international flights being cancelled.
Earlier this week, it had emerged that PIA had resorted to grounding several aircraft as it struggled to secure funds to maintain its operations for the next few months.
As per details, a number of domestic flights to and from Karachi were cancelled as the national flag carrier failed to pay Pakistan State Oil (PSO) for fuel supply.
A number of flights have been called off including two Karachi-Muscat, and two-way domestic ones from Karachi to Faisalabad, Islamabad and Lahore, according to sources.
The official said aircraft manufacturers — Boeing and Airbus — have also suspended spare parts supplies to the PIA over non-payment and the national airline was incurring losses worth millions of rupees daily due to limited flight operations.
PIA is currently experiencing a severe cash flow crisis, which has caused arrears with creditors, aircraft lessors, fuel suppliers, insurers, international and domestic airport operators, and even the International Air Transport Association (IATA), according to a stern warning from the Ministry of Aviation last week.
Consequently, the national flag carrier had been compelled to ground five of its 13 leased aircraft, with the possibility of four more facing a similar fate, the ministry said.
On Wednesday, a report in Bloomberg quoted the carrier’s spokesperson Abdullah Khan as saying the airline had to cancel a number of domestic and international flights after grounding at least five of its Airbus A320 jets.
The report quoted him as saying that PIA must pay at least $100 million immediately to about half a dozen leasing firms it has engaged for chartering aircraft, airport authorities, aircraft spares and others.
“PIA’s liabilities have increased to Rs743 billion or $2.5bn, which exceeds its total assets by five times, according to data compiled by Bloomberg,” the report said.
