European regulators have confirmed they are in "constructive dialogue" with the Pakistan Civil Aviation Authority (PCAA) over PIA - Pakistan International Airlines (PK, Islamabad International) resuming flights to the European Union after it was banned from the bloc in 2020 following a scandal over fake pilot licenses.

A spokeswoman for the European Union Aviation Safety Agency informed ch-aviation: "EASA and the European Commission are in constructive dialogue with the Pakistan CAA. A visit to Pakistan by an EASA team will depend on the progress of those discussions".

This followed numerous media reports that a remote audit of PIA by EASA a few months ago would be followed by an on-site audit of the airline and the PCAA in September 2023.

EASA banned the Pakistani flag carrier from EU airspace on July 1, 2020, over a fake pilot license scam at the airline. UK and US aviation regulators followed suit. The scandal was revealed following a parliament inquiry into the crash of a PIA A320-200 at Karachi International on May 22, 2020, which questioned the legality of the credentials of almost a third of all pilots trained in Pakistan. This resulted in 262 of Pakistan's 860 pilots being grounded, including 141 of PIA's 434.

Meanwhile, Pakistan Aviation Minister Khawaja Saad Rafique has suggested that PIA may resume flights to the UK in the next three months after the country's National Assembly on July 20, 2023, unanimously passed two new bills - the Pakistan Civil Aviation Bill (2022) and the Pakistan Airports Authority Bill (2022). They bifurcate the role of the CAA - one for regulating civil aviation activities and the other for providing civil aviation services and developing aviation infrastructure.

They also facilitate the outsourcing of three national airports for a specified period to lift standards to international levels. These include Islamabad International, Lahore International, and Karachi International.

Speaking in the National Assembly, Rafique said the bills marked an important step towards ensuring compliance with international civil aviation standards and revitalising the national carrier by enabling its return to the US, UK, and Europe. He said the flight bans cost PIA PKR70 billion rupees (USD242.7 million) monthly in lost revenue.

"Yesterday's legislation also removed the last hurdle to PIA starting flights to the UK and other countries," he announced on Twitter afterwards. According to Reuters, he earlier told Parliament: "God willing, the PIA flights will resume at least to the UK in three months, and, later, flights to Europe and America will resume".

"The time has come to make hard, true and right decisions," Rafique tweeted. "If there is to be progress, the best practices of the world have to be adopted. If PIA is not restructured, it may shut down in one and a half years," he warned.

Citing examples such as South African Airways (SA, Johannesburg O.R. Tambo) and Air India (AI, Delhi International), he said PIA should be semi-privatised. "We also have to hand over the operation of PIA to the private sector to make it a top-class airline," he said.

"I was against privatisation. But even a person like me has now realised that if PIA [which is] facing a loss of PKR80 billion (USD277 million) this year remains as it is, its loss will balloon to PKR259 billion (USD898 million) by the year 2030," he was cited by Pakistan's Dawn newspaper.

"Can Pakistan afford this? No, it can't. So what should be done? What South African Airways and Air India have done," he said, referring to the Tata Group in India having recently ordered 450 aircraft for Air India. For its part, PIA only had 27 or 28 operational aircraft making it uncompetitive against the powerful Gulf carriers, he remarked.

Rafique also disclosed a plan to convert PIA into a holding company. He said a PKR742 billion (USD2.5 billion) loan liability and all the properties owned by PIA would be transferred to this company.

Regarding the outsourcing of airports, the minister clarified that it is not tantamount to privatisation. He assured that no employees would be retrenched and that all employment benefits would remain available. He said outsourcing aimed to improve airport operations by engaging specialist operators.