Aircraft grounding cost PIA dearly

Airline suffered a loss of Rs22b, audit officials told PAC

ISLAMABAD:

Audit officials on Wednesday told parliament's accountability arm that the Pakistan International Airlines (PIA) suffered a loss of Rs22 billion due to the prolonged grounding of its aircraft.

The Auditor General's Office informed the Public Accounts Committee (PAC) that the PIA aircraft spent an extended period in routine maintenance, ranging from 44 to 239 days, resulting in substantial losses in 2022.

While discussing the Aviation Division's audit objections for the year 2023-24, officials revealed that one aircraft was grounded for 652 days. The audit department was of the view that, due to the management's negligence, extended delays occurred, resulting in unjustified operational and financial losses of Rs21.82 billion.

The PIA incurred further losses of Rs8.6 billion due to the failure to dispose of spare parts or retired aircraft. The audit observed that the management held an inventory of spare parts from retired aircraft valued at Rs8.566 billion for the period 2015-2021, which had not been disposed of in violation of rules. The spares included parts from 747, 707, Cessna, SA-310, and WB-737 aircraft.

The audit observed that the failure to dispose of spare parts reflected negligence and inefficiency.

In addition to losing Rs2.61 billion due to the non-implementation of board of directors' directives regarding properties, and another Rs1.669 billion due to irregular payments made without validation by the user department, the PIA also suffered a loss of Rs0.112 billion from the irregular procurement of stores and spares.

In 2022, the audit pointed out that PIA management had procured various items amounting to Rs0.112 billion without observing Public Procurement Regulatory Authority (PPRA) rules and through non-prequalified vendors.

In response to these objections raised by the Auditor General's Office, officials from the Ministry of Defence said that aircraft were grounded due to restrictions following the Covid pandemic.

The grounding also became necessary due to global supply chain issues. They attributed it to structural repairs, financial constraints, and payment issues that affected the ability to conduct timely maintenance and repairs.

The delays in the roll-out of these aircraft were caused by unscheduled repairs in the fuselage structure. Structural repairs are both unforeseen and require additional time and materials," the defence ministry said, adding that leases on these aircraft were also reduced to a minimum.