Saudi Arabia has again threatened to halt flights operated by PIA - Pakistan International Airlines (PK, Islamabad International) unless the airline pays USD48 million in accumulated fees, jeopardising the carriage of tens of thousands of Pakistanis heading to Saudi Arabia for Hajj.

Four years ago, Saudi authorities halted PIA during the busy pilgrimage period after the majority state-owned airline failed to meet its payment obligations. PIA is reported to have approximately 50,000 passengers booked on upcoming pilgrimage flights to either Madinah and Jeddah International. The airline has hundreds of Hajj flights scheduled between now and the start of August, when the pilgrimage season ends.

During an economic coordination meeting last week, Pakistan's Finance Minister Ishaq Dar reportedly disclosed the fresh Saudi warning. The Pakistani government also issued yet another reform edict for its flag carrier, saying any loss of access to Saudi Arabia would be inconvenient for passengers and cause PIA further reputational damage.

The latest reform attempt is led by Prime Minister Shehbaz Sharif, who reportedly attended last week's meeting and constituted a committee headed by Ishaq Dar to develop reform proposals and present them to the federal cabinet. Both Sharif and Dar blamed the previous government for PIA's current challenges.

Meanwhile, the government has told PIA to increase its fleet to 49 aircraft, hoping the added capacity will give the carrier the financial uplift it needs. According to ch-aviation Commercial Aviation News, Operator & Airport Data data, PIA presently has 33 aircraft in its fleet, although only 22 are flying. The airline lost PKR38 billion Pakistani rupees (USD132.8 million) in the first quarter of 2023, a 171% increase on the loss experienced in the comparable 2022 quarter. The government partly attributes the most recent loss to the depreciation of the rupee against the dollar, as well as rising oil prices and interest rates.