Mounting Losses & Piling Debt Crippling PIA

Reports from the Pak news outlet ARY put the tax debts of PIA at over $1.4 billion. The carrier has even asked for a government bailout to the tune of $157 million after failure of several attempts to privatise it. The faulty policies of successive governments have soaked PIA into a sea of losses and debt where it sees no saviour … writes Kaliph Anaz

Pakistan’s official carrier, Pakistan International Airlines (PIA) is now carrying the image of the country’s economic despondency around the world. The troubled airline better known for its mismanagement and poor services has been in news for the past several years for its financial irregularities. High operating costs, inefficiencies, incompetence and looting of yesteryears have left the airline with accumulated losses of over $3.3 billion as of 2020.

Reports from the Pak news outlet ARY put the tax debts of PIA at over $1.4 billion. The carrier has even asked for a government bailout to the tune of $157 million after the failure of several attempts to privatise it. The faulty policies of successive governments have soaked PIA into a sea of losses and debt where it sees no saviour. Even the Kingdom of Saudi Arabia airport authorities are reluctant to let it survive further on credit. Reportedly, the Saudi airport authorities including King Abdul Aziz International Airport, Jeddah and King Khalid International Airport, Riyadh have sent final notices to PIA for clearing their dues. Till now the generosity of Saudi authorities had ensured a trouble-free run for the ailing airlines despite pilling up dues to the tune of nearly $ 40 million. However, weary of PIA management’s antics of avoiding the settlement of liability, they have demanded clearances of outstanding dues.

According to some experts tracking the airline industry, the problems of PIA in Saudi Arabia are not limited to financial woes. The civil aviation authority of the Kingdom has warned it several times in the past on the issue of flight delays and poor services. Notably, PIA’s time punctuality has been less than twenty per cent in the last six months. Earlier, the frequent delays had even resulted in the shifting of PIA flights from Jeddah’s North Terminal to Hajj as a penalty. Shifting of its Jeddah operation towards Hajj Terminal was a major blow to PIA’s reputation, and market share and was inconvenient for passengers, particularly Umrah pilgrims.

Closure of PIA operations at any airport in Saudi Arabia would adversely impact Hajj operations as well as the Pak government’s prestige. PIA has been criticized for its inefficiencies, including overstaffing and a lack of modernization in its operations. The airline has also been accused of corruption, which has further contributed to its financial troubles.

Besides, the airline has had a number of safety incidents over the years, including several crashes. In 2020, the European Union Aviation Safety Agency (EASA) suspended PIA’s authorization to operate in European airspace due to concerns over the safety of the airline’s operations. This also suggests the presence of political interference which leads to issues like the appointment of unqualified staff and the misuse of airline resources. Due to its poor image, PIA is currently banned from flying to the EU, the UK, and the US – three huge markets for international travel that give a strong indication of its fast deterioration. Attempting to retain a hold on coveted slots at London Heathrow (LHR) while not in use, PIA has temporarily offered these to Turkish Airlines and Kuwait Airways.

Incidentally, PIA has been mired in drug trafficking incidents with 17 kg of heroin seized (Dec 2016) at Karachi Airport from a plane bound for Jeddah. Similar instances were reported (Mar 2017) from flights heading to the UK and the arrest of PIA crew members (Mar 2018) for smuggling narcotics on an Islamabad-Paris flight.

In April 2023, online media outlets were filled with reports about PIA pilots protesting against unpaid salaries at the airlines. The pilots are reportedly warning not to operate any flights until they get paid. For the suffering pilots, the crunch could not have come at a worse time amid sky[1]high inflation in a country squeezed by a shortage of foreign currency reserves.