pakistan injects rs 17bn to keep crashing airlines afloat
Last Updated : GMT 09:07:40
Egypt Today, egypt today
Egypt Today, egypt today
Last Updated : GMT 09:07:40
Egypt Today, egypt today

Pakistan injects Rs. 17bn to keep crashing airlines afloat

Egypt Today, egypt today

Egypt Today, egypt today Pakistan injects Rs. 17bn to keep crashing airlines afloat

Pakistan International Airlines.
Islamabad - Egypt Today

The semi-state-owned Pakistan International Airlines (PIA) was approved Rs. 17.02 billion by the government in the form of “sovereign guarantees” and other financial aid — a second bailout in the space of six months, the PIA spokesperson confirmed to Arab News on Tuesday.

PIA, a profitable airline which became a burden on the country’s already stressed exchequer, has been dying a slow death for years.

“The government did agree to park the interest till we get some respite,” but since the approved document has not been shared with the airline management, Mashood Tajwar, the struggling carrier’s general manager and official spokesman, was unable to provide further details.

PIA had amassed a colossal debt of $3.33 billion (Rs. 406 billion) up from last year’s $2.92 billion in July, and the fresh bailout from the economic coordination committee headed by Finance Minister Asad Umar is part of Prime Minister Imran Khan’s plan to attempt nursing the airline back to health before considering privatization. Khan also holds the ministerial portfolio for aviation division.

The outgoing government tried to privatize the airline but met legal hitches and criticism over its attempt to sell what once was a national asset and pride of the country.

The national flag carrier has a new chief executive and president appointed by the premier. Umar is optimistic that under the “energetic and enthusiastic” retired air marshal Arshad Malik, PIA will “experience a turnaround.”

Tajwar clarified that the latest injection or “support” is not necessarily all bailout. He told Arab News that the approval empowers the airline to “borrow from banks” against guarantees from the Ministry of finance. Of the Rs.17.02 billion, Rs.10 billion is sovereign guarantee and a further Rs. 40.8 billion has been allocated in the form of cash for PIA by the ministry.

However, continuous foreign loans taken by the airline have added to its woes and made its situation worse. PIA immediately owes $125.84 million to foreign lenders.The sharp decline of Pakistan’s currency has made debt servicing harder and devaluation further affected the previous financial support package by the government.

In May, the apex court objected and barred the airline from changing livery on its planes to the country’s national animal, the Markhor (the screw horn goat), part of its rebranding and repositioning strategy. The decision resulted in further loss to PIA.

The airline has suffered through operating financially unsustainable routes, grounding of aircraft because of technical problems, overstaffing, incompetent employees, union strikes, inadequate fleet, and wrong strategies. The open sky policy of the government allowed foreign airlines to take a large chunk of PIA’s business, further driving the struggling carrier into the ground.

The airline competition is so fierce that it would take several years before signs of a break even surface, said the spokesperson. PIA is in dire need of strategic planning and quick revenue generation if its management hopes to ward off privatization in the future by the government which is currently optimistic it can help to resurrect it.

But aviation Industry expert Tahir Imran told Arab News that when the airline witnessed a decline in its losses some years ago, it made the fatal decision to increase its passenger capacity by inducting larger aircrafts instead of enhancing its flight frequency by purchasing smaller more efficient and economical aircrafts. This, he said was the final nail in PIA’s coffin.

From :Arabnews

 

egypttoday
egypttoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

pakistan injects rs 17bn to keep crashing airlines afloat pakistan injects rs 17bn to keep crashing airlines afloat



GMT 11:52 2016 Saturday ,01 October

Polish runner wins world's toughest race

GMT 14:05 2017 Tuesday ,10 October

CAPRICORN (December22nd-January20th)

GMT 04:51 2017 Thursday ,04 May

Oil dips on small US crude stock drop

GMT 16:49 2011 Wednesday ,09 February

Rain hampers resuce effort in Brazil slides

GMT 20:37 2017 Friday ,31 March

Trump seeks to 'reboot' US relationship

GMT 08:09 2017 Sunday ,31 December

'Historic' turning point in Italy's migrant crisis

GMT 07:26 2017 Sunday ,13 August

Experts point finger at Dutch oversight agency

GMT 07:24 2017 Sunday ,12 November

IMF agreed to provide Egypt with a new part of loan

GMT 14:17 2018 Friday ,07 December

Over 60% of Russians use Internet every day

GMT 12:30 2018 Thursday ,04 October

Apple, Amazon deny report on Chinese hardware attack

GMT 15:56 2016 Monday ,10 October

Family in the dock after Indian girl fasts to death

GMT 09:01 2012 Wednesday ,02 May

Rare Cezanne auctioned in US

GMT 01:55 2016 Thursday ,25 August

5 arrested after grenade attack in Mogadishu

GMT 04:35 2017 Wednesday ,25 January

‘La La Land’ ties record with 14 Oscar nominations

GMT 07:26 2011 Friday ,16 September

Hyundai pushes to tap deeper into China\'s commercial
 
 Egypt Today Facebook,egypt today facebook  Egypt Today Twitter,egypt today twitter Egypt Today Rss,egypt today rss  Egypt Today Youtube,egypt today youtube  Egypt Today Youtube,egypt today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

egypttoday egypttoday egypttoday egypttoday
egypttoday egypttoday egypttoday
egypttoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
egypttoday, Egypttoday, Egypttoday