Boeing, Airbus likely to suspend’ supplying spare parts to Pakistan International Airlines

Due to Pakistan International Airlines’ (PIA) significant cash flow issues, major aircraft manufacturers Boeing and Airbus are about eliminating supplying spare parts to the carrier by mid-September. Due to a liquidity issue, PIA has told the Economic Coordination Committee that it will not be able to fulfil its financial commitments to creditors, aircraft lessors, fuel suppliers, airport operators, the International Air Transport Association (IATA), and others.

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Five of PIA’s 13 leased aircraft have been grounded as a result of its financial difficulties, and another four are anticipated to be grounded within the next week. In order to assess a reasonable share price for potential privatisation, PIA has emphasised the importance of maintaining the state-run airline’s operations.

However, during an ECC meeting, the demand from PIA for a bailout of Rs22.9 billion and the postponement of Rs1.3 billion monthly to the Federal Bureau of Revenue (FBR), along with loans and interest payments until a restructuring plan is finalised was rejected.

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The ECC chose to establish a different committee to evaluate PIA’s restructuring plan instead. Moreover, the request to postpone making monthly payments to FBR and the Civil Aviation Authority (CAA) was turned down. Once the committee had adopted a specific restructuring plan, it was the responsibility of the Finance Division and the State Bank of Pakistan to support PIA.

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