Pakistan International Airlines, that once was the star of the global aviation industry, is now bankrupt- that’s the long and short of it. The national flag carrier owes billions of rupees to various creditors, including Pakistan State Oil (PSO), which has reportedly stopped supplying fuel to the airline due to non-payment of dues. The crisis has been brewing for a long time as PIA has been suffering from chronic losses, mismanagement, over-staffing, corruption, and political interference. The airline has failed to compete with other domestic and international airlines, and has seen its market share and reputation decline over the years. According to some reports, PIA has accumulated a debt of over Rs400 billion, and is operating at a loss of Rs6 billion per month.
The situation deteriorated in October 2023, when PSO allegedly suspended the fuel supply to PIA after the airline failed to pay Rs220 million for the weekend. This led to the cancellation of 77 flights on Sunday, October 22, affecting both domestic and international passengers. The crisis continued for the next few days, as more flights were cancelled or delayed due to the fuel shortage. PIA claimed that it had paid the amount to PSO, and blamed the bank closure on Sunday for the delay in clearing the dues. PSO, however, denied the claim and said that PIA still owed them Rs60 million for the remaining fuel.
The crisis has exposed the poor governance and lack of accountability in PIA, as well as the lack of coordination and cooperation among the relevant authorities. The caretaker prime minister, Anwaarul Haq Kakar, has directed the authorities to expedite the privatization process of PIA, which has been stalled for years due to legal and political hurdles. However, privatization alone may not be enough to save the airline, unless it is accompanied by a comprehensive reform plan that addresses the structural and operational issues that plague PIA. The airline needs to improve its efficiency, quality, safety, and customer service, as well as reduce its costs and liabilities. Otherwise, it may soon become a relic of the past, unable to fly even in the skies of Pakistan.
