Cashless PIA unable to disburse salaries to its staff amid prescribed privatisation
Business
The airline has already grounded some aircraft
ISLAMABAD (Dunya News/Web Desk) – The unending financial crunch isn’t going to end for Pakistan International Airlines (PIA) – the national flag carrier – as its employees are yet to receive their August salaries who have been left in the lurch amid the persistent inflation never witnessed in the country’s history before.
According to the PIA sources, the airline is facing great difficulties after the Federal Board of Revenue (FBR) decided to freeze its accounts – a move triggered by the PIA’s inability to pay the taxes.
Read more: FBR freezes PIA bank accounts over unpaid taxes
On the other hand, a PIA spokesperson claimed that the government had promised to release funds and the salaries would be disbursed in the current month.
Unfortunately, the state-owned airline is a case study candidate for all the wrong reasons when compared with its profitmaking peer from Ethiopia which is also a Third World country.
Read more: Ethiopian Airlines and PIA: A tale of two Third World state-owned entities
The present crisis coincides with the government plan to privatise the national flag carrier as the state-owned enterprises have been draining the national resources while the International Monetary Fund (IMF) is pressing Islamabad to introduce fiscal discipline and go for their privatisation.
Read more: Aviation minister fears Rs259bn loss if PIA not privatised
As of December 31, 2022, the PIA’s accumulated debt and liabilities had reached Rs743bn which is five times more than the total value of its assets.
Meanwhile, total losses for the last financial year (2022-23) stood at Rs86.5bn out of which Rs11bn were operational losses as the airline’s management has been unable to introduce plans to make it a viable entity once again.
That’s why the national flag carrier had reportedly grounded several aircraft – including three of Boeing 777s – because of unbridled journey of dollars and surge in petroleum products prices.
At the same time, Boeing and Airbus may discontinue the supply of spare parts by mid-September.
But what is the solution on offer? Give us more money as the aviation ministry has reportedly requested injection of Rs23 billion as well as suspension of duties, taxes and service charges.
