Pakistan International Airlines (PIA) has temporarily grounded some of its planes due to a severe cash flow crisis. The airline is struggling to secure funds to maintain its operations and has arrears with various creditors. As a result, five of its leased aircraft have been grounded, with the possibility of more facing the same fate. Boeing and Airbus are also on the verge of discontinuing the supply of spare parts. The Ministry of Aviation has requested an immediate cash injection of Rs23 billion and the suspension of duties, taxes, and service charges to help PIA. However, no concrete and viable business plan has been presented. Despite the challenges, PIA’s spokesperson has reassured that the airline will not close by September 15, although the situation remains tough. PIA’s financial woes stem from competition, internal mismanagement, and insufficient funding for fleet expansion. The airline has accumulated significant debt, amounting to five times the value of its assets. Several attempts to make PIA sustainable have failed, and a restructuring plan is now being pursued. The plan includes creating a new holding company and attracting private investment. However, the plan is still awaiting government approval. The Aviation Division has requested funds from the government to cover payments and loans until the restructuring is complete. A separate panel has been formed to assess the restructuring plan, and the finance ministry and State Bank of Pakistan have been directed to support PIA once the plan is finalized.
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