PIA Seeks Bailout Package Worth Rs. 45 Billion to Finance Operations

Pakistan International Airlines (PIA) is seeking another Rs. 45 billion bailout package from the government to cover interest costs and fund operations. The demands were presented before Finance Minister Ishaq Dar on Thursday, who did not immediately commit to any additional financial support. Dar instead asked management to create a viable business plan, reported Express Tribune. The PIA has reportedly requested a Rs. 22 billion federal injection to pay off the interest on its loans, Rs. 15.6 billion in additional sovereign guarantees to take out more loans, and another Rs. 7 billion to purchase an aircraft. The Ministry of Aviation has also requested that the five-year government facility to pick the interest cost, which expires on June 30, be extended until the airline’s balance sheet is restructured. At least three PIA restructuring exercises have taken place since 2017, but in the absence of a viable business plan, the national flag carrier has been incurring big losses. The then-government chose PIA’s interest rate for five years in December 2017 on the condition that the airline becomes financially viable. The PIA management, on the other hand, requested yesterday that the interest-payment facility be extended until the financial restructuring is completed. The government budgeted Rs. 15 billion for interest payments in the current fiscal year. However, PIA has requested an additional Rs. 22 billion. In a meeting, it claimed that the finance ministry had allocated Rs. 15 billion in the budget, despite an annual requirement of nearly Rs. 32 billion. The airline asserts that the total debt servicing cost for this fiscal year would increase to Rs. 37 billion due to an increase in interest rates. Currently, PIA owes big to the Pakistan State Oil Company, K-Electric, and the Federal Board of Revenue, as well as costs related to fleet insurance and aircraft and engine lessors.