Pakistan International Airlines (PIA) has requested yet another bailout package worth Rs. 23 billion from the government in order to stay afloat.

The PIA management met with interim Finance Minister Dr. Shamshad Akhtar last week seeking urgent liquidity. The caretaker government hasn’t accorded its approval yet but asked the national flag carrier to submit an achievable debt repayment plan, according to Express Tribune.

During the meeting, the PIA management informed the caretaker finance minister of a Rs. 23 billion funding shortage faced by the airline. Instead of accepting the carrier’s bid for a full and direct bailout, Shamshad instructed PIA to secure Rs. 13 billion in sovereign guarantees and the remaining Rs. 10 billion, both from banks.

PIA asked the finance minister for assistance in obtaining such bank loans since its decrepit financial statements didn’t allow it to acquire such liquidity on its own.

Shamshad directed PIA to present an achievable restructuring and privatization plan to the federal cabinet. The finance minister further asked the airline to pitch a realistic business proposal that should include management’s own efforts rather than relying just on handouts from the federal government.

PIA’s persistent financial problems are cause for concern, but its inability to meet debt repayment obligations over the last decade is widely seen as the bigger issue. At least three PIA restructuring exercises have been carried out since 2017 but without a credible framework for guaranteed repayment.

Pertinently, the flag carrier got Rs. 15 billion from the previous government in the previous fiscal year. Also, the finance ministry endorsed Rs. 4 billion in bridge funding payable to the Civil Aviation Authority (CAA) last month, which will be handed out in 4QFY24.

Source: Pro Pakistani