The Saudi Arabian General Authority of Civil Aviation (GACA) asked the Pakistani national airline, the Pakistan International Airline (PIA) to pay $48 million outstanding dues to avoid suspension of operations including Hajj flights.
The GACA also warned that the repatriation of the fifty thousand Hajj pilgrims will not commence until the payments are made. People familiar with the developments said that the revelations were made by finance minister Ishaq Dar during the economic coordination meeting chaired this week.
The highly mismanaged Pakistani state airlines may even close down as the ECC failed to release the PKR 22 billion pending claims on account of markup up to June 2023, releasing mere PKR 4 billion.
It was also revealed that AerCap, a lessor of the PIA, impounded its B-777 aircraft last month at Kuala Lumpur. It was released after the Pakistan government made the overdue payment and pleaded the PIA receipts through the International Air Transport Association (IATA) clearing house.
Pakistan Prime Minister Shehbaz Sharif on Wednesday said that a high-level committee chaired by the finance minister will work out the restructuring, reformation and revival of the PIA.
Aviation minister Khawaja Saad Rafiq, planning minister Ahsan Iqbal, commerce minister Syed Naveed Qamar, special assistant to the PM and secretary aviation are the other members of the committee.
The PIA is also facing a lawsuit in the US from Willis Leasing over non-payment. To avoid any further adverse action, the PIA are removing and returning the two A-320 aircraft engines leased from them. PIA insurance broker Alliana also issued a termination notice and demanded overdue payments and said once insurance stops so will flight operations.
The PIA’s IATA membership was also in peril as it did not pay outstanding dues to the tune of over $2.8 million. The last date for payment was June 21. The payment was done on June 23.
Despite its hardships, the PIA has been also tasked to increase its fleet from 27 to 49, which the government hopes will also steer the airline out of the crisis.
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