ISLAMABAD: As the financial crisis at the Pakistan International Airlines (PIA) reaches a critical point, the administration of the national flag carrier in a desperate move is contemplating partial suspension of both domestic and international flights, according to sources.
The sources revealed that PIA has already started working on a backup plan – ‘Plan B’ – which involves reducing flight operations by 15 to 25 per cent.
Following the decision by the caretaker government to privatise PIA rather than provide financial assistance, the national carrier has been left with no choice but to reduce operational expenses.
It has been reported that PIA requires Rs33 billion in order to meet mandatory payments to both domestic and foreign institutions, including employee salaries. However, with funds not forthcoming from the Ministry of Finance, PIA has resorted to approaching commercial banks for loans.
Due to the non-disbursement of funds, PIA management has begun working on ‘Plan B’, which involves partial suspension of flight operations and the cessation of unprofitable routes.
The proposed plan will see a gradual reduction in domestic flights, followed by limitations on international flights. Popular routes, such as Islamabad, Lahore, Karachi, Gilgit, and Skardu, are expected to have their flight availability restricted in the first phase.
In the second phase, flights to Gulf countries, including UAE, Kuwait, and Saudi Arabia, will be affected.
Moreover, in an effort to reduce costs, PIA has already downsized its fleet by grounding 16 aircraft in an attempt to alleviate the financial strain.
PIA struggling to pay bills, wages
Meanwhile, the national flag carrier admitted on Friday it was struggling to pay bills and wages after local media reports said the fleet may be grounded within days.
Abdullah Hafeez, spokesman for government-owned Pakistan International Airlines, said the company was seeking urgent financial help from the treasury, but had secured funds “for the time being”.
“But we do struggle due to balance sheet challenges,” he said. “That is why PIA is seeking balance sheet restructuring support from the owners.”
Hafeez said three flights were grounded Thursday and that salaries had been paid late.
Twenty-five aircraft from a fleet of 31 were still flying, with the others grounded for scheduled or unscheduled maintenance, he said.
Roosevelt Hotel for sale
Similarly, the caretaker government is also expediting the sale process of Roosevelt Hotel in the United States. To facilitate the auction of the property, the government has extended an invitation for proposals from interested parties for the appointment of a financial advisor.
As per the guidelines set forth by the government, firms wishing to participate in this opportunity are required to submit their applications for financial advisors no later than October 9. Additionally, a non-refundable fee of $1000 must accompany each submission.
Technical documents detailing the necessary requirements and specifics for submitting the applications can be accessed on the Privatization Commission’s official website. Prospective bidders are advised to thoroughly review these documents to ensure compliance with all necessary criteria.__Tribune.com