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Pakistan's cash-strapped national carrier runs out of fuel, 26 flights cancelled

The problems for PIA started when the Federal Bureau of Revenue froze all its bank payments in July for non-payment of dues. The airline's request for emergency funding and deferment of payments was also declined.

Edited By: Aveek Banerjee @AveekABanerjee Islamabad Published on: October 22, 2023 21:39 IST
The cash-strapped Pakistani airline is facing a fuel supply
Image Source : ANI/REPRESENTATIVE The cash-strapped Pakistani airline is facing a fuel supply crunch.

The Pakistan International Airlines (PIA) suffered a serious setback in its operations as it was forced to cancel as many as 26 flights due to unavailability of fuel in the midst of a prevailing financial crisis.

Geo News reported citing sources familiar with the matter that the 26 flights were cancelled from Karachi, Lahore, Islamabad, Quetta, Bahawalpur, Multan, Gwadar and other cities after the Pakistan State Oil (PSO) slashed its fuel supply to the country's national carrier.

The PIA administration is reportedly looking into the matter and is expecting the fuel supply to be restored by Sunday itself once credit lines are available, said a spokesperson of the carrier. He further said that affected passengers are being provided with alternate flights so that their travel remains unimpeded.

At least 18 flights were cancelled from Karachi, of which three were bound for Islamabad, whereas two Karachi-bound flights were also cancelled from Lahore and Islamabad respectively. Only three flights will take off from Karachi on Sunday as per the fuel adjustment plan.

The Pakistani national carrier is going through desperate financial woes after the Federal Bureau of Revenue (FBR) froze all of its bank accounts due to non-payment of taxes in July, after which it was unable to clear its its dues owed to the PSO.

The PIA sought an emergency bailout of Rs 22.9 billion in September that was rejected by Pakistan's Economic Coordination Committee (ECC). The ECC also declined a request for deferment of the payments of Rs 1.3 billion per month, which PIA pays to FBR against Federal excise duty (FED), and Rs 0.7 billion per month paid to the Civil Aviation Authority (CAA) against embarking charges.

The PIA's problems worsened when its flight was briefly stopped in Canada on complaints regarding ground handling and fuel company complaints. The plane was released after dues worth $200,000 was cleared.

In August, the airline had to ground 11 aircraft as the financial crisis was exacerbated by a lack of funds and an increase in the prices of petroleum products. 

The 11 grounded aircraft included a Boeing 777, Airbus and an ATR, which have been called by a senior official as "beyond repair" due to not fulfilling the requirements of engines and other parts. The airline operates around 30 aircraft and has been unable to procure spare parts for the last three years due to scarcity of funds.

At the time, a PIA spokesperson also cited Pakistan's increasing dependency on foreign currency as one of the reasons behind the aircraft being grounded.

ALSO READ | Pakistan's cash-strapped national carrier grounds 11 aircraft due to severe financial crisis

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