PIA sought Rs17b loan to come out of financial crisis: sources
In another attempt to come out of the financial crisis, the Pakistan International Airlines (PIA) management sought Rs17 billion loan from the National Bank of Pakistan (NBP) and a private bank, citing sources, ARY News reported on Thursday.
Following a severe financial crisis this month, the PIA management sought Rs13 billion loan from the National Bank of Pakistan (NBP) and Rs4 billion from a private bank.
Sources said that both banks were reluctant to provide a huge loan to the national flag carrier. The national airline s financial crisis would be intensified in case of rejection from the banks as PIA would not be able to repay due taxes to the Federal Board of Revenue (FBR).
Sources added that the payments of the aircraft leasing and fuel companies would be stopped besides stopping the repair works of the planes.
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The management had already acquired Rs4 billion loan for the payment of salaries and other expenditures.
The PIA spokesperson confirmed that negotiations are underway with two banks for Rs17 billion loan. The spokesperson clarified that the banks did not reject the provision of loans so far.
The spokesperson said that a delay was made due to preparations of the concerned documents.
Cancellation of flights
Pakistan International Airlines (PIA) on Thursday cancelled several domestic and international flights amid a major financial crunch.
Sources privy to the development told ARY News that several domestic flights to and from Karachi were cancelled as the national flag carrier failed to pay Pakistan State Oil (PSO) for fuel supply.
The cancelled flights include Karachi-Turbat, Karachi-Gwadar, Karachi-Quetta, Karachi-Sukkur and Karachi-Multan.
It is pertinent to mention here that Pakistan International Airlines (PIA) is grappling with a severe financial crisis, raising concerns about its ability to sustain air operations amidst mounting debts.
Read more: PIA financial crisis: International authorities reject collaboration
It emerged Wednesday that the bank accounts of Pakistan International Airlines (PIA) were unblocked after matters between the national flag carrier and the Federal Board of Revenue (FBR) over non-payment of dues were settled.
The bank accounts were unblocked after the national flag carrier assured the tax collection body of clearing all pending dues and submitted written assurance.
According to FBR spokesperson, PIA will pay Rs2.5bn this month as per the agreement.
The previous Pakistani administration of Prime Minister Shehbaz Sharif said it wanted to privatize the airline, while the caretaker government of the country has instructed relevant authorities last week to finalize its restructuring plan.