PIA in trouble: Houston operation also suspended

02 Nov, 2006

Facts speak louder than fiction, and the undeniable facts show that the national carrier, Pakistan International Airlines, is in deep trouble right now, both operationally and financially.
A crisis-like situation prevails in the PIA head office following suspension of landing rights for PIA Boeing-747/300 and Airbus A-310 aircraft by European Union at European airports for not maintaining safety standards listed by European Aviation Safety Agency (EASA). Pakistan's exports are also likely to be affected badly, as PIA would not now be able to operate its Boeing 747-200 Combi to USA.
In its latest bid, to overcome the ugly situation PIA is faced with, the airline has suspended, for indefinite period, its flights to Houston. The last flight left here on Friday, October 27, and the next was due on November 3, which stands cancelled.
PIA had started with two flights a week for Houston--Karachi-Manchester-Houston and Karachi-Lahore-Manchester-Houston--but subsequently the frequency was reduced to only one flight a week. The Boeing 777-ER thus released may be put on EU route.
Earlier, PIA had faced the ban imposed by FAA on direct flights to US as the US was not satisfied with security clearance measures at Pakistan's airports. This had resulted in a setback for PIA as the Boeing 777-LR version is a long haul aircraft and stopping at Manchester not only made the operation expensive, it also affected the performance of the aircraft. The aircraft is designed in a way that it has to remain in the air for a certain number of hours for good performance and profitable operation.
The present confusion may get more confounded when the Haj operations start from early next month and Saudi Arabia also adheres to EU policy with regard to EASA safety standards. Besides this, PIA may have to cross another hurdle in operating the aged leased L-1011 aircraft for Haj in case they are over 25 years of age as Saudi aviation regulations do not allow aircraft of over 25 years of age.
Financially, the airline is in bad shape, too. It had posted a net loss of over Rs 6 billion during the period January 2006 to June 2006, which surged to Rs 8.9 billion by the end of September. At this rate, the airline may end up with a loss of Rs 11 to 12 billion till the close of financial year ie December 31, 2006.
The PIA management in its 2006 budget had projected a profit of Rs 1.2 billion, which seems to be a far cry. The airline had earlier taken a loan of Rs 3 billion from Standard Chartered Bank to tide over its losses and improve its liquidity.
According to these sources, a meeting is to be held with government functionaries in Islamabad on November 2, where PIA management intends to ask for $100 million assistance to meet its obligations.

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