PIA seeks Rs23b bailout from government

[Peaceful Civilian]

ISLAMABAD:
The Pakistan International Airlines (PIA) has sought yet another bailout package worth Rs23 billion from the government to remain afloat – a demand that the interim set-up has not accepted yet and instead asked the national carrier’s management to prepare a viable restructuring plan.
The PIA management met with caretaker Finance Minister Dr Shamshad Akhtar this week and sought financing of Rs23 billion, according to people familiar with the discussions.
However, they added that the airline could not immediately win the bailout package.
The PIA is the country’s highest public sector loss-making entity and successive governments have been doling out money from the budget to keep it afloat.
Yet, there is no plan to install a professional management and the affairs of the PIA are handed over to air force officers, who do not have experience in running commercial airlines.
The PIA management informed the caretaker finance minister in the meeting that there was a financing gap of Rs23 billion.
However, the finance ministry asked it to arrange Rs13 billion funds from the banks against the available space of annual sovereign guarantees limit.
In the last fiscal year, the government had increased the limit of the sovereign guarantees to over Rs263 billion for taking more loans to maintain a steady position.
In case, the PIA fails to service its debt, the banks have the option of cashing these sovereign guarantees.

The ministry further told the national carrier that the rest of the Rs10 billion should also be arranged from the banks.
The PIA sought the finance minister’s intervention to acquire loans from the banks, as its balance sheet did not support more borrowings.
During the first three months of this year, there was a phenomenal increase of 170% in the PIA’s quarterly losses that jumped to Rs36.8 billion, according to its balance sheet.

The airlines’ cumulative losses have increased to Rs686.7 billion. Its current liabilities are Rs369 billion higher than its assets.
The finance minister instructed the airline to present a restructuring and privatisation plan to the federal cabinet.
The previous government had amended the PIA Act towards its fag end aimed at allowing the sale of its majority shares and transfer of management control to private buyers.
In 2016, parliament placed restrictions on the sale of more than 49% shares and management transfer -- a move that blocked the PIA’s privatisation process.
Sources said the finance minister asked the airline to prepare a viable business plan, which should also reflect the management’s own efforts instead of just relying on the federal government’s handouts.

https://tribune.com.pk/story/2432722/pia-seeks-rs23b-bailout-from-govt

 

[ziaulislam]

View attachment 949236

ISLAMABAD:
The Pakistan International Airlines (PIA) has sought yet another bailout package worth Rs23 billion from the government to remain afloat – a demand that the interim set-up has not accepted yet and instead asked the national carrier’s management to prepare a viable restructuring plan.
The PIA management met with caretaker Finance Minister Dr Shamshad Akhtar this week and sought financing of Rs23 billion, according to people familiar with the discussions.
However, they added that the airline could not immediately win the bailout package.
The PIA is the country’s highest public sector loss-making entity and successive governments have been doling out money from the budget to keep it afloat.
Yet, there is no plan to install a professional management and the affairs of the PIA are handed over to air force officers, who do not have experience in running commercial airlines.
The PIA management informed the caretaker finance minister in the meeting that there was a financing gap of Rs23 billion.
However, the finance ministry asked it to arrange Rs13 billion funds from the banks against the available space of annual sovereign guarantees limit.
In the last fiscal year, the government had increased the limit of the sovereign guarantees to over Rs263 billion for taking more loans to maintain a steady position.
In case, the PIA fails to service its debt, the banks have the option of cashing these sovereign guarantees.

The ministry further told the national carrier that the rest of the Rs10 billion should also be arranged from the banks.
The PIA sought the finance minister’s intervention to acquire loans from the banks, as its balance sheet did not support more borrowings.
During the first three months of this year, there was a phenomenal increase of 170% in the PIA’s quarterly losses that jumped to Rs36.8 billion, according to its balance sheet.

The airlines’ cumulative losses have increased to Rs686.7 billion. Its current liabilities are Rs369 billion higher than its assets.
The finance minister instructed the airline to present a restructuring and privatisation plan to the federal cabinet.
The previous government had amended the PIA Act towards its fag end aimed at allowing the sale of its majority shares and transfer of management control to private buyers.
In 2016, parliament placed restrictions on the sale of more than 49% shares and management transfer -- a move that blocked the PIA’s privatisation process.
Sources said the finance minister asked the airline to prepare a viable business plan, which should also reflect the management’s own efforts instead of just relying on the federal government’s handouts.

https://tribune.com.pk/story/2432722/pia-seeks-rs23b-bailout-from-govt

Just close it and default on the loan
Sell the plans for parts

By doing so you will save enough money to build a hydroelectric dam

There is Askari airlines already
Let them enjoy

 

[epebble]

The PIA management met with caretaker Finance Minister Dr Shamshad Akhtar this week and sought financing of Rs23 billion,

The PIA is the country’s highest public sector loss-making entity and successive governments have been doling out money from the budget to keep it afloat.

That, my friends, is how you define Chutzpah.

 

[SD 10]

Damn it...... sell it!!! be done with it! Sell Pia, railway, steel mill, pakistan pst etc.....

 

[One_Nation]

First fill it with ppp jiyalays then ask for bailout.

 

[Hyde]

it’s been years since I last used PIA as there are no more direct flights to Europe.

May be they should close the commercial side of PIA and handover the planes to Pakistan Army for personal use of military. Our Generals must be finding it difficult to travel by road so they need it.

 

[VkdIndian]

ISLAMABAD:
The Pakistan International Airlines (PIA) has sought yet another bailout package worth Rs23 billion from the government to remain afloat

Who is the chairman PIA?

Governments have no business of running non strategic businesses. They generally make a mess of it.

In case of airlines, the bureaucrats and those who are running it, give freebies to each other. It becomes one big party. Free unlimited tickets all over the world etc etc.

Privatise it and let professionals run the show, not self serving babus.

 

[PakAlp]

Who is the chairman PIA?

Governments have no business of running non strategic businesses. They generally manke a mess of it.

In case of airlines, the bureaucrats and those who are running it, give freebies to each other. It becomes one big party. Free unlimited tickets all over the world etc etc.

Privatise it and let professionals run the show, not self serving babus.

Owned by government of Pakistan, its a big mess, they have enough business but just make a mess out of it, I am guessing the employees and government must be making a killing out of it. Our Railway, Steel Mill is also a mess. I believe all are nationalised and they have 1000s of ghost employees, people who have never worked but earn pension lol

 

[epebble]

Governments have no business of running non strategic businesses. They generally manke a mess of it.

In case of airlines, the bureaucrats and those who are running it, give freebies to each other. It becomes one big party. Free unlimited tickets all over the world etc etc.

Privatise it and let professionals run the show, not self serving babus.

Type of ownership is not always the determinant of quality or success. Some fairly well-run airlines are publicly owned.
1.Turkish Airlines
2. China Eastern Airlines
3. China Southern Airlines
4. Air France
5. Air China
6. Qatar Airways
7. Emirates
Whereas Thomas Cook, easyJet and Ryanair are rated quite low though privately owned.

 

[PakAlp]

Type of ownership is not always the determinant of quality or success. Some fairly well-run airlines are publicly owned.
1.Turkish Airlines
2. China Eastern Airlines
3. China Southern Airlines
4. Air France
5. Air China
6. Qatar Airways
7. Emirates
Whereas Thomas Cook, easyJet and Ryanair are rated quite low though privately owned.

Good point but their governments are well run aswell. In Pakistan our government is one of the worst in the world, It then reflects on all state owned entities. Corruption, ghost employees has destroyed them. The state owned business should be run by highly qualified and professional people but corrupt politicians get involved to make money, they then give jobs to their relatives in safarish.

 

[epebble]

Good point but their governments are well run aswell. In Pakistan our government is one of the worst in the world, It then reflects on all state owned entities. Corruption, ghost employees has destroyed them. The state owned business should be run by highly qualified and professional people but corrupt politicians get involved to make money, they then give jobs to their relatives in safarish.

Agreed, but changing ownership to private will not automatically make it a success. Most likely, it will quickly go out of business.

 

[ThunderCat]

Shut the airline down. Sell off the fleet. Give the fired employees a small sum of the sales. Use the rest to pay off the depts. Time to restart PIA.

 

[VkdIndian]

Type of ownership is not always the determinant of quality or success.

You are right, but, there is a difference here. SE Asia has it’s own way of doing things.

The ones quoted by you, have government ownership, but, they employ professionals to run the show and there is no intervention. They also don’t use these entities like a cash cow and for distributing freebies. These traits are difficult to come by in these parts of the world.

You will hardly find any state run enterprise doing well in these parts of the world. In India, we had a long list, that are either in the process of privatisation or major restructuring.

We had Air India, that was doing well, till it was taken over by the government. Finally, sense prevailed and it was privatised again. This was done after multiple packages to try and revive it.

 

[Sayfullah]

Scrap pia

 

[Clutch]

Yet, there is no plan to install a professional management and the affairs of the PIA are handed over to air force officers, who do not have experience in running commercial airlines.

Sums it up. Faujeets and their corrupt PDM are gonna destroy Pakistan bit by bit.