ISLAMABAD: The accumulated loss caused by the European Union Aviation Safety Agency's (EASA's) ban to the aviation industry is likely to be above one billion USD or more, till the recovery from the licensing and the EASA fiasco, sources told Business Recorder. The EASA had suspended the authorisation for the Pakistan International Airlines (PIA) to operate in the European Union (EU) member countries for six months in July 2020.
The European Commission has decided to retain the ban on the PIA operations in its member countries, and asked the country's aviation authorities to remove safety deficiencies, and improve the whole process of issuing licenses to commercial pilots.
The PIA, which was already suffering in the aftermath of the Covid-19 crisis, reported a loss of Rs39.85 billion during the first nine month of the year 2020. Last year, the airline reported a loss of Rs42 billion.
PIA's revenues from January to September this year declined by 30 percent, that is to say from Rs107.34 billion (same period 2019) to Rs74.36 billion (2020). The EASA said it would conduct an audit of the third country operator, when it would consider the lifting of a suspension of the PIA operations, when the conditions were met.
However, the conditions had not been met yet. The EASA said in its letter to the Civil Aviation Authority (CAA), in particular, the investigation conducted by the European Commission on the issuance of professional licenses was still ongoing, which indicated that there was a possibility the audit would not have the expected positive results.
The sources said the government was going to grant a Rs500 billion bail-out package to the PIA to get out of the losses without any concrete business plan. The government should assure that after giving the bailout package, the PIA would not show losses in the balance sheet next year, the sources added.
While talking to Business Recorder, the spokesperson PIA, Hafeez Khan, said the total revenue loss on Europe and the UK routes was around Rs36 billion due to the EASA ban.
Expected loss was much more but the PIA compensated by mounting special charter flights with a partner, and continued operating to the UK and the European territories through this arrangement, he added.
The spokesperson said as part of restructuring plan, the PIA announced a voluntary separation scheme (VSS) on Monday, giving a two-week deadline to employees for a decision as loss-making state-run airline continues to be a drain on public funds for over a decade, ending on December 22nd. The government has already announced that it would shed half of employees of the loss-making PIA under its restructuring plan, and has set aside Rs12.69 billion for the VSS.
Copyright Business Recorder, 2020
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