PIA’s liquidity crisis worsens resulting in delay and cancellation of several flights
14 of the airline’s 31 aircraft have been grounded primarily due to a lack of funds for lease and spare support payments.
Pakistan International Airlines’ (PIA), liquidity crisis worsens resulting in the delay and cancellation of several domestic and international flights on Friday.
The national flag carrier airline is facing serious cash flow problems and as per the source, flight operations are feared to be suspended by September 15 (today) if emergency funds are not provided.
With nearly half of the fleet suspended, the cash-strapped PIA is facing a major financial crunch
According to the Jinnah International Airport Karachi’s schedule for Friday, Sep 15, PIA flights from Karachi to Bahawalpur (PK588 and PK589) and Karachi to Lahore (PK302 and PK303) have been cancelled.
The Karachi to Islamabad flight (PK368) has been delayed for three hours.
While Karachi to Lahore (PK304) is delayed by eight-and-a-half hours.
PIA flights to and from Karachi and Rahim Yar Khan (PK582 and PK583) were cancelled.
Meanwhile, Karachi to Multan (PK330) and Dubai (PK213) have been delayed by two hours.
Furthermore, the flight from Islamabad to Karachi (PK301) has been cancelled.
Adding more to it, Islamabad to Riyadh (PK753) is delayed by three hours and Lahore to Karachi (PK305) is delayed by two-and-a-half hours.
Earlier this week, PIA grounded several aircraft as it struggled to secure funds to maintain its operations for the next few months.
According to PIA’s spokesperson Abdullah Khan, as of Monday, Sept. 11, 14 of the airline’s 31 aircraft have been grounded primarily due to a lack of funds for lease and spare support payments.
The Ministry of Aviation in a stern warning issued last week, told the federal government that PIA currently was grappling with a severe cash flow crisis, leading to arrears with creditors, aircraft lessors, fuel suppliers, insurers, international and domestic airport operators, and even the International Air Transport Association (IATA).
Consequently, PIA had been compelled to ground five of its 13 leased aircraft, with the possibility of four more facing a similar fate, the ministry added.
On Wednesday, a report in Bloomberg quoted the carrier’s spokesperson Abdullah Khan as saying the airline had to cancel a number of domestic and international flights after grounding at least five of its Airbus A320 jets.
The report quoted him as saying that PIA must pay at least $100 million immediately to about half a dozen leasing firms it has engaged for chartering aircraft, airport authorities, aircraft spares and others.
“PIA’s liabilities have increased to Rs743 billion or $2.5bn, which exceeds its total assets by five times,” the Bloomberg report claimed.
Earlier on August 12, a number of domestic flights to and from Karachi were also cancelled amid a shortage of funds and the failure to pay Pakistan State Oil (PSO) for fuel supply.
