Many people questioned how long taxpayers would have to continue bailing out the indebted airline after PIA recently delayed a number of domestic and international flights after grounding five of its Airbus A320 aircraft. The reason given was that the airline lacked $100 million to ‘immediately pay’ its creditors.
According to a TV report, a PIA director warned that if emergency funds weren’t granted to cover arrears to creditors, aircraft lessors, fuel suppliers, insurers, domestic and international airport operators, and the IATA, the national carrier’s operations might be terminated. In his statement before a Senate panel, the head of the business’s HR department said that the closure of activities and services would “happen only over our dead bodies” since the company was having trouble obtaining funding.
His impassioned outburst demonstrates the level of resistance the latest plan to privatise the bankrupt airline is expected to encounter from both its unionised personnel and management with a stake in keeping the company in the public sector despite its significant costs.
As Boeing and Airbus are about to stop producing the PIA’s aircraft, the aviation ministry is asking for an immediate cash infusion of Rs23 billion as well as the suspension of levies, taxes, and service fees to domestic agencies to save the airline. The only option left for the government to temporarily save the corporation is to give in to the demand. However, this injection won’t be the end of PIA’s issues. It will eventually need to raise more money. However, it does highlight the necessity for the government to back up its promises when times are tough.
According to the aviation ministry, PIA’s debt and obligations have risen to Rs743bn, more than five times the value of all of its assets. By 2030, it is anticipated that its liabilities will soar to a staggering Rs1.97 trillion and its yearly losses will reach Rs259 billion.
There is no chance of saving the airline. There have been far too many failed attempts in the past. As a business and brand, the airline is now gone. The only option to lessen the burden on taxpayers and the government budget is through its swift privatisation.
The directives from interim prime minister Anwaarul Haq Kakar to the relevant agencies to
A report in this newspaper correctly contrasted PIA to state-owned electricity providers, pointing out that the airline only flies fewer than 3 percent of the nation’s passengers while nevertheless using a sizable amount of taxpayer money.
Conversely, the heavily criticised electricity firms serve around 80% of the population. It doesn’t excuse the power firms’ losses or the delays in their prompt divestiture. However, it does highlight the necessity for the government to follow through on its promises when times are tough.