The Pakistani government has ordered local banks to make an undisclosed amount of emergency funding available to PIA - Pakistan International Airlines (PK, Islamabad International), allowing the state-owned carrier to continue paying for aircraft leases, maintenance, and ground handling services.
As previously reported by ch-aviation, Pakistan's caretaker government has rejected a request from the airline for PKR23 billion Pakistani rupees (USD76.8 million) in emergency funding. Instead, it offered a partial guarantee and told the carrier to approach the banks. However, ch-aviation also reported that financial institutions were not rushing to do business with the financially beleaguered PIA.
This week, Pakistani media outlets reported that PIA was cancelling some domestic and international flights because it did not have the funds to pay Pakistan State Oil (PSO) for fuel. In addition, there are reports of PIA employees not being paid and the airline having to reduce its operational fleet to 15 planes if funds were not forthcoming. However, a PIA spokesperson told ch-aviation that the airline now expected to receive PKR20 billion (USD67.7 million) "to clear long standing dues of lessors and airport authorities."
The ch-aviation fleets module reveals 14 aircraft from PIA's 33-strong fleet are inactive, including six A320-200s, two ATR42-500s, one ATR72-500, two B777-200ERs, and three B777-300ERs. One lessor, believed to be AerCap, has reportedly asked for the return of five of its aircraft placed at PIA and has already repatriated two leased engines, rendering two planes inoperable. Aercap has seven aircraft placed at PIA - six A320-200s and one B777-200ER. ch-aviation has contacted Aercap for comment on the report.
A second lessor, Asia Capital Aviation Ltd, has initiated legal action against PIA in the UK courts in relation to the lease of A320-200 registered as AP-BLY (msn 2926). That plane was delivered to PIA in 2015 but ferried to Jakarta Soekarno-Hatta in October 2021 and has remained there ever since. At one stage, PIA had two A320s parked at Jakarta because of ongoing legal wrangles, however, the second has been remarketed to another operator.
Separately, Pakistan's Frontier Post also claims that PIA wants to return some grounded ATR - Avions de Transport Régional aircraft to service and hand them over to the Pakistan Naval Air Arm (Karachi Mehran). The airline presently has one ATR72-500 and four ATR42-500s in its fleet, with the ATR72-500 and two ATR42-500s inactive. PIA tells ch-aviation that they have handed one ATR over already and an option exists for the Navy to take another.
Pakistan's GEO News says PIA has immediate liabilities of PKR20 billion (USD66.7 million) and says that Airbus and Boeing could suspend spare parts supply if the airline could not guarantee ongoing payment of invoices. Suppliers, including aircraft and engine lessors, have faced difficulties securing payment, not just because PIA lacks cash, but also because Pakistan's central bank is restricting the flow of hard currencies out of the country, thereby interfering with the settlement of invoices. Local media report that the next round of funding is expected to be made available to PIA as soon as next week.
