It is hard to remember the last time PIA travelers had a hassle-free, enjoyable flight without last-minute cancellations, delays, or grumpy cabin attendants. However, the events of Sunday stood out: the national flag carrier had to cancel nearly 80 domestic and international flights due to a lack of fuel, which prevented it from operating its reduced fleet. PSO, PIA’s fuel supplier, reportedly stopped providing fuel due to growing outstanding debt. For at least the last week, PIA’s flight operations have been subjected to a growing number of delays and cancellations due to the airline’s severe financial losses and tense standoff with PSO.
PIA owes the oil supplier Rs26.7 billion, which includes about Rs25 billion in past due arrears and Rs2 billion in new outstanding debt related to recent oil supply. Despite promises made over the last few months, PIA has not been able to pay its debt. According to a report, the carrier had committed to paying PSO in advance each day in order to purchase fuel for its aircraft operations. The system functioned for a few days until PSO allegedly ceased funding PIA’s operations and PIA ran out of money.
It is unrealistic to ask PSO, which is also experiencing financial difficulties as a result of power firms withholding payments of Rs760 billion, to save a failing airline when no other state agency is willing to assist it.
The airline is losing about Rs13 billion every month, and its total liabilities—which now surpass its assets by a significant margin—have already reached Rs713 billion. The airline is completely bankrupt. It is obvious that financial rescues would not bring it back to life because it is essentially dead as a brand and a corporation. Its fleet has shrunk to just 19 operational but aging aircraft; safety concerns prevent it from operating on many international routes; and on domestic routes, it faces fierce competition from newer, more capable private airlines that provide superior services at lower costs. In the midst of a severe economic crisis, IA’s new record for the number of flights canceled in a single day highlights how urgently its operations must be concluded to prevent future losses to taxpayers. Plans to pay off debt, sell assets, and keep or lay off personnel might all be finalized and carried out at a later time.