Islamabad September 13 2023: Pakistan’s flag carrier has begun scaling back its operations as unpaid bills rack up and lessors block the carrier from flying their aircraft unless it makes overdue payments.
State-owned Pakistan International Airlines Corp. 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, the carrier’s spokesperson Abdullah Khan said. PIA also hasn’t been able to pay salaries or airport charges.
PIA’s woes come amid Pakistan’s worst economic crisis. The country narrowly avoided a sovereign default after it secured a $3 billion loan from the International Monetary Fund in July. The national carrier has survived on regular bailouts from the government, and received a support commitment earlier this week.
On Wednesday, the carrier had to cancel a number of domestic and international flights after it grounded at least five of its Airbus A320 jets, Khan said. PIA’s liabilities have increased to 743 billion rupees or $2.5 billion, which exceeds its total assets by five times, according to data compiled by Bloomberg.