Pakistan’s national airline carrier, Pakistan International Airlines (PIA), has faced a financial crisis leading to the cancellation of numerous domestic and international flights due to unpaid fuel bills. The airline, which has long been criticized for inefficiency and mismanagement, is grappling with dwindling funds, exacerbated by Pakistan’s balance of payments crisis stemming from overwhelming debt repayments.
According to Athar Awan, a deputy spokesman for PIA, 48 international and domestic flights were canceled on Tuesday and Wednesday due to “non-availability of fuel.” An anonymous PIA official disclosed that the disruption in fuel supply was a result of non-payment of dues to Pakistan State Oil, as the airline is facing a severe financial crisis.
Pakistan’s economy has been marred by decades of mismanagement and instability. This year, Islamabad sought a bailout from the International Monetary Fund (IMF) to prevent a default. As part of a broader privatization plan for state-run companies, the interim government has expressed its intention to sell off the national airline.
Caretaker Prime Minister Anwaar-ul-Haq Kakar emphasized the need for transparency and expediency in the privatization process to minimize financial losses to the national exchequer.
A senior official at Pakistan State Oil (PSO) indicated that they were only providing fuel for flights prioritized by PIA. PIA had agreed to pay the oil firm 100 million Pakistani rupees (around $360,000) daily to settle its dues, with a payment of 150 million rupees received on Wednesday, allowing the refueling of 26 flights.
In a statement, PIA expressed its expectation that normal service would resume from the following day, as it had paid for fuel “from its own resources.” However, further details were not provided.
Reports from Bloomberg suggest that PIA has liabilities amounting to 743 billion rupees (around $2.5 billion), exceeding its total assets by five times.
Established in 1955 when the government nationalized a struggling commercial airline, PIA enjoyed rapid growth until the 1990s. However, its reputation was marred by a series of strikes, hijackings, and accidents, including a tragic Airbus crash in Karachi in May 2020, which claimed the lives of 97 passengers and crew.