ISLAMABAD – Due to financial constraints, the Ministry of Finance has turned down a request by the Pakistan International Airline (PIA) for a bailout package of Rs 15 billion and has asked the airline to improve its management. An official source said the PIA management wanted an immediate provision of Rs 15 billion, as the airline was facing liquidity crunch.
They also demanded the rolling over of the debt of Rs 143 billion. PIA is also not able to borrow from the market due to its poor financial condition. The demand was made at the meeting of the Cabinet Committee on Restructuring (CCOR) of public sector enterprises (PSEs) chaired by Finance Minister Dr Abdul Hafeez Shaikh. PIA managing director and the defence secretary gave briefings on the affairs of the national carrier.
The sources said the finance minister turned down PIA’s request and directed its management to come up with a viable restructuring plan within a week for approval.
The minister directed the PIA management to improve its performance in order to be able to borrow from the open market. According to a statement, the CCOR received a briefing on the PIA Corporation, from year 2001 to 2010, including on operational expenses, revenue earning, effects of the increase in oil prices, excessive employment, devaluation of Pak Rupee in the capital market, and its impact on the overall financial conditions.
The Finance minister sought suggestions to remove bottlenecks and constraints in the way of the airlines. PIA management highlighted requirements of airline and said it received no allocation from the government from the 2009. The meeting was attended by Minister for Defence Chaudhry Ahmad Mukhtar, Minister of State for Finance Hina Rabbani Khar, secretaries for Defence and finance and other officials.
