PIA unable to fly, resulting in more flights cancellations
Business
Worsening financial crisis comes as IMF team is to reach Pakistan on Nov 2 for deal review
KARACHI (Dunya News/Web Desk) – More flights on domestic and international routes were cancelled on Wednesday as the cash-strapped PIA is unable to fix its finances and ensure fuel to sustain flight operations, forcing the passengers to look for other options.
Wednesday saw cancellation of as many as 49 flights, meaning that those living in the smaller towns and cities in the far-flung regions of Pakistan are also facing great hardships as people of places like Gwadar, Turbat, Skardu and Gilgit prefer air travel to save time and avoid fatigue.
Most of these cancelled flights were again from or to Karachi which is the busiest airport in Pakistan for being the commercial hub of the country.
The reason behind PIA’s inability to secure funds remains the fact that neither any financial institution is ready to extend loan facility nor the federal government has been showing interest in another bailout amid the absence of any room for fiscal adjustment.
The current crisis comes as the case for the privatisation of state-owned enterprises is strengthening under the IMF conditions aimed at reducing fiscal deficit as these loss-making entities have been proving a burden on national exchequer.
In a related development, an IMF mission will visit Pakistan on Nov 2 to discuss the first review of the country's current $3 billion standby arrangement (SBA), the lender's resident representative said on Tuesday.
Read more: IMF team to visit Pakistan on Nov 2 for first review of standby arrangement
Given the current state of affairs, the privatisation of state-owned enterprises, especially the national flag carrier, will certainly on agenda as the IMF isn’t ready to relax its conditions.
Meanwhile, the disruption in flight operations is badly affecting PIA in terms of revenue generation as many of the cancelled flights cover the Middle East regions which offers one of the most profitable routes thanks to the millions of expat Pakistanis working in these wealthy countries.
This trend means more and more passengers will opt to other airlines for better service as the affluent Pakistanis are already using the foreign operators including Europeans and those which are based in the UAE, Qatar or Saudi Arabia.
The rupee devaluation and rising fuel costs have played a major role in the current financial crisis. However, PIA has remained dependent on the government bailouts for decades after its failure to develop a sustainable business model that could expand its coverage and attract more passengers both at domestic and international levels.
In fact, the national flag carrier has greatly reduced the number of destination on international routes while the PIA plane crash in Karachi and the controversy regarding pilots during the PTI government further complicated the affairs through the ban on PIA flights imposed by the European Union's Aviation Safety Agency (EASA).
