PIA ‘unable’ to pay August salaries to employees

Finance ministry disputes media reports regarding lack of govt support for national flag carrier

ISLAMABAD:

As the Pakistan International Airlines (PIA) continues to grapple with serious cash flow crisis, it has reportedly been unable to pay salaries to its employees for the month of August due to lack of issuance of funds by the federal government.

The national flag carrier is also said to be in dire straits after the freezing of its accounts by the Federal Board of Revenue (FBR).

However, the Ministry of Finance dismissed as false and baseless media reports of the government not extending financial support to the PIA.

A day earlier, it was reported that the national flag carrier had grounded several aircraft as it strived to seek funds to continue its operations for the next few months.

It was further said that the airlines’ primary functions and non-core assets were expected to be put up for sale during the period.

Last week, the aviation ministry had informed the federal government that the PIA was facing a serious financial crunch, leading to issues such as arrears with creditors, aircraft lessors, fuel suppliers, insurers, international and domestic airport operators.

As a result, the PIA has been compelled to ground five of its 13 leased aircraft, with the possibility of four more facing a similar fate, the ministry noted.

The aviation ministry maintained that Boeing and Airbus were near discontinuing the supply of spare parts by the middle of this month, and therefore, requested the government for a release of Rs23 billion, suspension of duties, taxes and service charges to domestic agencies.

Sources said that the PIA had still not paid salaries to its employees for the month of August due to financial constraints.

It was further reported that the freezing of accounts by the FBR had added to the miseries of the national flag carrier.

Clarifying its stance, the finance ministry rejected reports in one section of the media regarding lack of provision of funds to the PIA by the federal government.

In a statement, the ministry emphasised that the government had extended help to the national flag carrier in the past and would continue to do so in the future.

The finance and aviation ministries are fully supporting the financial arrangements required for the operational requirements of the PIA, the statement said.

It noted that PIA had recently negotiated fresh credit facilities with the financial institutions under the guarantee limit provided by the government.

These credit facilities will help the national flag carrier to pay any dues and continue its operations without any interruption, the statement added.

The PIA spokesperson hoped that the national carrier’s staff would be remunerated this week.