PCAA seeks clearance of bills

Pakistan Civil Aviation Authority (PCAA) has approached the federal government, asking it to intervene and direct the national flag carrier - Pakistan International Airlines - to clear its outstanding bills in line with a decision of the Economic Coordination Committee (ECC).

The ECC had approved the freezing of outstanding payments of Pakistan International Airlines Corporation Limited (PIACL) to PCAA along with late payment penalty at Rs95.796 billion as of December 31, 2018, with the directive that PIACL should pay the applicable charges from January 1, 2019 onwards.

However, the airline failed to start clearing the applicable charges from January 1, 2019. Current dues payable to PCAA accumulated to Rs17.056 billion as on December 31, 2019.

Sources told The Express Tribune that the issue was taken up in a cabinet meeting while considering the renewal of Regular Public Transport (RPT), Aerial Work and Charter Licences of PIACL.

The Aviation Division informed the cabinet that PCAA had submitted a case for the renewal of RPT and Aerial Work Licence Class-II (domestic/international) and the Charter Licence Class-Il (domestic/international) of PIACL with effect from April 1, 2020 for a further period of two years.

PIACL’s licences were last renewed for around one year from April 19, 2019 to March 31, 2020. Subsequently, the PCAA director general extended validity of the licences for 120 days.

Flight Standards, Airworthiness and Consumer Protection Branch/Directorates of the PCAA had no objection to the renewal of PIACL licences. However, its Finance Directorate conveyed that the airline had not complied with the ECC decision, which required it to start clearing current applicable charges from January 1, 2019.

Furthermore, the PCAA’s Economic Oversight Branch conveyed that the paid-up capital of PIACL was negative and the carrier had also failed to submit the required security deposit for the licences.

A loss-free paid-up capital and security deposit were necessary preconditions under Article 4.3.2 of the National Aviation Policy (NAP) 2019 for the renewal of licences.

Article 4.3.3 of NAP 2019 stipulates that operations of a carrier should be suspended if it defaulted on outstanding dues for a period equivalent to two fortnightly bills and recovery should be made from the attachment and/or sale of its tangible and intangible assets.

To ensure continuity of PIACL’s operations and for the renewal of its licences, it was necessary to relax provisions of NAP 2019. While powers to renew the existing licences had been delegated to the federal minister for aviation, the powers to relax provisions of NAP 2019 rested with the federal cabinet.

The Aviation Division sought approval of the cabinet for easing provisions of NAP 2019 for the renewal of PIACL’s licences. The cabinet was also requested to direct PIACL to act on the ECC’s earlier directive and clear its outstanding bills at the earliest.

The cabinet considered the summary titled “Renewal of RPT, Aerial Work and Charter Licences of Pakistan International Airlines Corporation Limited” and approved the proposal of Aviation Division.

Published in The Express Tribune, August 18^th, 2020.

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