Govt Approves Another Rs. 4 Billion Grant for PIA

The Economic Coordination Committee (ECC) of the Cabinet approved Rs. 20 billion.  Supplementary technical grants of Rs 4 billion to pay the revenue of Pakistan International Airlines (PIA).

Federal Finance Minister and Revenue Senator Muhammad Ishaq Dar chaired the meeting of the Economic Commission for Europe today.

Sources said that the Civil Aviation Department has asked the ECC to release PIAC's outstanding claims of Rs. 22.94 billion in terms of profit margin by June 2023 which enabled it to overcome its cash flow problems.

It should be noted that a meeting was held at the Prime Minister's Office on December 30, 2017, in which it was decided that the profit margin on PIA loans would be collected by the Palestinian Authority for five years (from July 2018 to June 2023). and will be paid.  Direct lenders.

Accordingly, from July 2018 to November 2022, the borrowers have been paid the profit margin on Pakistan Government guaranteed loans from PIA.

The Ministry of Finance has allocated 2000 billion rupees for this. 15 billion during the 2022-23 financial year against a demand of Rs. 31.5 crores out of which  14.689 billion used by November 2022.  From December 2022 to June 2023, the increase was Rs. 23,255 was sent to the Finance Department for release of additional funds. 22.94 billion rupees but no amount has been released yet.

It was reiterated that failure to release additional support for profit margin payments has exacerbated PIA's already ongoing cash flow problems.  As of now, PIA is having a hard time paying the profit margins from the available operations cash flow, yet it has not reached the point where it can no longer make payments.

Converting operating cash flows into profit margin payments delays payments in respect of PIA's core operating obligations.  This includes payment in respect of various services without which flight operation would not be possible such as aircraft charter and payment in respect of airport services.

It should be noted that out of PIA's fleet of 31 aircraft, 13 aircraft were purchased on lease.  Some of the most important cases and notifications received by PIA in this regard.

A PIA plane was seized by Malaysia and later released under a court order, while another charterer filed a non-payment case in a US court.

Some other lessors including the International Air Transport Association (IATA) issued a warning to pay their arrears of $2.8 million which was also paid on June 23, 2034 and with difficulty the Aviation Division told the ECC that the P  It will not be possible for IA to continue.  Its operations if the margin is equal to Rs.  22.9 billion was not released immediately.