PIA - Pakistan International Airlines (PK, Islamabad International) has reportedly requested almost PKR45 billion Pakistani rupees (USD157.1 million dollars) from the Pakistani government to fund interest payments and operating costs.
According to The Express Tribune, the request was made to Pakistan's Finance Minister Ishaq Dar on April 6, 2023. PIA - Pakistan International Airlines reportedly wants PKR22 billion (USD76.8 million) to meet upcoming interest payments on existing loans, PKR15.6 billion (USD54.5 million) in the form of sovereign guarantees to facilitate more loans, and PKR7 billion (USD24.4 million) to acquire an unspecified type of aircraft. The minister has reportedly asked the airline's board to produce a viable business plan ahead of any decision.
In late 2017, the Pakistani government agreed to cover PIA's interest payments for five years on the basis that the carrier restructured and made efforts to became financially viable. Between late 2017 and September 2022, PIA's losses reached PKR633 billion (USD2.21 billion) and no restructuring has occurred. The agreement to cover interest payments expires on June 30, 2023.
The Tribune reports that the Pakistani government allocated PKR15 billion (USD52 million) in the current financial year to cover PIA's interest payments even though the expected interest expense was PKR32 billion (USD110 million). Owing to rate rises, that expense is now PKR37 billion (USD130 million). The airline also reportedly owes money to the Pakistan state oil company, utility provider K-Electric, the Federal Board of Revenue, as well as insurers, aircraft and engine lessors. The airline is also seeking tax and duties exemptions relating to the importation of aircraft parts and spares.
The requested increase in sovereign guarantees is reportedly needed to secure loans to keep the airline in the air, with the existing guarantees of PKR248 billion (USD870 million) fully tapped out. Recently, ch-aviation reported that Pakistan's aviation minister Khawaja Saad Rafique wants to see PIA restructured, despite past efforts to restructure and/or privatise the airline having failed. According to ch-aviation PRO airlines data, PIA - Pakistan International Airlines flies to 40 destinations in 16 countries with a fleet of 22 aircraft (a further 11 are inactive).
