The Pakistan International Airline (PIA) has sought a bailout package worth Rs 23 billion Pakistani currency (approx. 75 million USD) from the government to continue its services amid the huge debt burden, The Express Tribune reported on Sunday.
The Express Tribune is a daily English-language newspaper in Pakistan
The Express Tribune reported that the demand has been made from the Pakistan interim set-up which has not been accepted yet.
The interim set-up despite releasing funds, has asked the national carrier’s management to prepare a viable restructuring plan.
The Express Tribune reported, according to the people familiar with the matter that the PIA management met with caretaker Finance Minister Dr Shamshad Akhtar and sought financing of Rs 23 billion.
However, they added that the airline could not immediately win the bailout package.
The news daily reported that the PIA is the country’s highest public sector loss-making entity and successive governments have been doling out money from the budget to keep it afloat.
Yet, there is no plan to install a professional management and the affairs of the PIA are handed over to Air Force officers, who do not have experience in running commercial airlines.
The PIA management informed the caretaker finance minister in the meeting that there was a financing gap of Rs 23 billion.
However, the finance ministry asked it to arrange Pak currency Rs 13 billion in funds from the banks against the available space of the annual sovereign guarantees limit.
In the last fiscal year, the government increased the limit of the sovereign guarantees to over Rs263 billion for taking more loans to maintain a steady position.
In case, the PIA fails to service its debt, the banks have the option of cashing these sovereign guarantees.
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