Pakistani Prime Minister Nawaz Sharif has directed state-owned carrier PIA - Pakistan International Airlines (PK, Islamabad International) to prepare a two-year business turnaround plan as part of the conditions laid down for it to secure a PKR 161.5 billion (USD1.54 billion) government bailout.
Earlier this month, the Economic Coordination Committee of the Cabinet (ECC), on the recommendation of government's Aviation Division, agreed to increase the original state-backed guarantee requested by PKR10.5 billion (USD100 million) to help cover the airline's "immediate financial needs"
A statement said PIA's more pressing financial commitments amount to PKR6.7 billion (USD64 million) needed to pay-off aircraft leasing dues, Federal Excise Duties, and various regional civil aviation authorities. Among those is the Saudi General Authority of Civil Aviation (GACA) which has warned PIA it risks being banned from Saudi airspace unless USD21 million worth of debts is paid off immediately.
As such, according to The Nation newspaper, Minister for Planning and Reforms Ahsan Iqbal has required the two-year turnaround plan to be submitted by January 26, for Sharif's personal approval.
PIA's total debt is estimated to stand at well over PKR330 billion (USD3.15 billion).
Government pledged to partially privatise the airline as part of a USD6.7 billion national bailout loan agreed with the IMF in 2013. However, with the end of the funding plan in September last year, no formal progress in securing a willing investor has been made.
