PIA avoids huge embarrassment after FBR restored its bank accounts
Business
Repeated episode is making privatisation case stronger
ISLAMABAD/KARACHI (Dunya News/News Desk) – The Pakistan International Airline (PIA) on Thursday managed to get its frozen accounts restored after successful talks with the Federal Board of Revenue (FBR) which had taken the extreme step a day earlier over the failure to pay the dues.
It is a big relief for the national flag carrier given the fact that a European Union Aviation Safety Agency (EASA) team is currently in Pakistan to inspect the PIA facilities and review the measures taken by the Civil Aviation Authority regarding pilot licences and airworthiness.
The visit comes as the PIA flights to Europe [as well as the UK] have been suspended after the EASA revoked the national carrier's authorisation to fly to the bloc following the pilot licence scandal triggered by the irresponsible policy adopted and statements given by Chaudhry Ghulam Sarwar – the then aviation minister in the PTI government.
Read more: Ethiopian Airlines and PIA: A tale of two Third World state-owned entities
A successful review by the EASA team will help in restoration of the PIA operations to the lucrative European market as the airline is in a dire need to improve its business.
FROZEN
Earlier on Wednesday, the FBR had decided to freeze all the 28 accounts operated by the national flag carrier which had recently witnessed over two weeks of flight cancellations after it failed to ensure supply of fuel amid dwindling revenue and rising expenditure.
The frozen accounts are nothing new for the PIA as the FBR resorted to this extreme action in the past too, with the state-run airline unable to meet its financial obligations. Currently, the FBR wants early disbursement of over Rs2.70 billion in federal excise duty (FED).
At the same time, the Pakistan State Oil (PSO) – one of the profitable SOEs – has also warned the PIA of suspending the fuel supply if the dues are not paid by today (Thursday), with the amount in question stated to be around Rs1.50bn.
With no details provided about how the PIA will manage to pay the amount in question, it is believed that the move to unfreeze the bank accounts is based on the need to deal with the visiting EASA team.
MAKING PRIVATISATION UNAVOIDABLE?
The PIA is constantly in the news albeit for all the wrong reasons and the repeated episode has been only making the case for privatisation of the state-owned enterprises (SOEs) even more stronger.
Following an embarrassing situation which saw hundreds of flights cancelled, the PIA in late October had reached an agreement with the PSO, which agreed to increase the credit limit for the airline to Rs500 million, with the national flag carrier continue paying Rs100m daily.
However, the inability to devise a workable and profitable working plan to make the airline sustainable again means it is still in a quicksand at a time when the International Monetary Fund (IMF) wants Pakistan to dispose of the lossmaking SOEs at the earliest to reduce budget deficit.
