ISLAMABAD: Caretaker Prime Minister Anwaar-ul-Haq Kakar on Thursday instructed authorities to expedite the privatization process of the Pakistan International Airlines (PIA) “urgently” as the country’s national flag carrier faces a massive financial crunch that has forced it to scale down flight operations.
The previous government of former prime minister Shehbaz Sharif announced on August 7 its plan to privatize the loss-making PIA, with the move coming after Pakistan agreed to fiscal discipline plans with the International Monetary Fund (IMF) in exchange for a $3 billion bailout program in June. The state-owned enterprise, which has accumulated billions of rupees in debt and arrears over the decades, has required bailout packages from successive Pakistani governments to keep operating. The current administration of PM Kakar also turned down PIA’s request for a Rs23 billion ($76 million) bailout package to help ease off its financial crisis.
On Monday, PIA spokesperson Abdullah Khan told Arab News 14 of the airline’s 31 aircraft have been grounded primarily due to lack of funds for lease and spares support payments. As the PIA’s financial woes worsened, PM Kakar chaired a meeting on matters related to the national airline on Thursday during which he was briefed on the privatization process, the Prime Minister’s Office (PMO) said in a statement.
“The Prime Minister said that process needs to be expedited urgently so as to provide a reliable service to the users and to raise the standards of the national flag carrier to match the global airline standards,” the PMO said. “He directed all the relevant stakeholders to find an immediate solution to the matters related to this privatization.”
The prime minister tasked new caretaker minister for privatization, Fawad Hasan Fawad, to oversee the national flag carrier’s privatization and to “complete it on a fast-track basis,” the PMO added.
PIA is facing a severe financial crunch at a time when Pakistan is in the throes of an economic crisis that saw it narrowly avoid a sovereign debt default by securing the bailout package from the IMF.
The national airline, already compounded with financial issues, suffered further problems in March 2020 when its flights were grounded due to the coronavirus pandemic. When it resumed operations in May 2020, a domestic PIA flight crash in Karachi killed 97 out of 99 people on board, prompting an initial inquiry that pointed to a number of safety failures.
The inquiry sparked a disclosure from authorities that nearly a third of PIA’s pilots may have falsified their qualifications, prompting the European Union Aviation Safety Agency (EASA), the US Federal Aviation Administration (FAA) and other regulators to ban PIA flights, adding to the airline’s financial troubles.