ISLAMABAD: The total amount of domestic and foreign loans against Pakistan International Airlines (PIA) stands at Rs429.267 billion.
In a written reply to a question from Member National Assembly Ms Rana Ansar, the Federal Minister for Aviation, Khawaja Asif, told the house that the PIA obtained a total of Rs268.2 billion in bank loans and Rs161.067 billion loan from the government of Pakistan as on 30th September 2023.
He said that the PIA obtained these loans to deal with cash flow constraints and to induct aircraft, engines, and procure spares for the sustenance of operational requirements.
The minister said that the PIA is facing severe cash flow challenges, which in turn affected its regularity and punctuality due to fleet constraints.
He said that the major areas that caused losses the most of (i) finance cost, (ii) exchange gain (loss), (iii) increase in fuel price, and (iv) increase in Karachi Interbank Offered Rate (KIBOR) rate. He said that despite the above, robust attempts are made to avoid delays.
He said that the PIA cancelled a number of flights due to fleet constraints. He said that to overcome the ongoing challenges of financial constraints and operation, the government has decided to undertake the divestment process. He said that the process is underway and expected to be complete by June 2024 as per government’s directives.
He said in the financial year 2022, the revenue increased due to the launch of new routes such as Baku while the high operational cost was mainly due to the high fuel consumption and its related charges. He said that net loss increased significantly due to the increase in exchange loss by 1.62 times in 2022 as the rupee devalued.
Copyright Business Recorder, 2024
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