In a significant development, the General Authority of Civil Aviation (GACA) in Saudi Arabia has recently issued a notice to Pakistan International Airline (PIA) demanding the payment of $48 million. The purpose of this payment is to prevent the suspension of PIA’s operations, which would include their crucial Hajj flights. This financial obligation serves as a vital prerequisite to ensure the uninterrupted travel of pilgrims.
Saudi Arabia Direct PIA Flights: $48 Million for Hajj
The recent meeting of the Economic Coordination Committee, presided over by Finance Minister Ishaq Dar, brought forth a crucial revelation.
It was disclosed during this gathering that the General Authority of Civil Aviation (GACA) in Saudi Arabia has issued a notice to Pakistan International Airline (PIA), demanding the payment of $48 million.
This demand serves as a critical condition to prevent the suspension of PIA’s operations, including the vital Hajj flights.
During the recent meeting, the members were informed by the Civil Aviation Authority that the General Authority of Civil Aviation (GACA) in Saudi Arabia has issued a notice to Pakistan International Airline (PIA) for the payment of $48 million.
The purpose of this payment is to prevent the suspension of operations, including the crucial Hajj flights.
The Civil Aviation Authority has issued a warning stating that the repatriation operation of over fifty thousand Hujjaj who have already traveled to KSA will not begin until the payments demanded by GACA are made.
This cautionary announcement emphasizes the critical importance of fulfilling the financial obligations to ensure the safe return of the pilgrims.
Furthermore, the division revealed that AerCap, one of PIA’s lessors, took possession of PIA’s B-777 aircraft on May 29, 2023, in Kuala Lumpur, Malaysia, due to overdue payments.
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However, following a court order and the submission of PIA receipts through IATA clearing House, the aircraft was subsequently released.
This incident highlights the significance of timely payments and the subsequent resolution of financial matters for PIA’s operational stability.
In another legal development, Willis Leasing, another lessor, has filed a lawsuit in a US court against non-payment. To mitigate the risk of an unfavorable decision, sources who attended the meeting revealed that two A-320 aircraft engines, which were leased by Willis Leasing, are being forcibly removed and returned to them.
This action underscores the urgent need for resolving the payment issues to maintain a positive standing and avoid further complications for PIA.
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In a significant development, Aliana insurance broker has issued a termination notice, highlighting the criticality of making overdue payments. If the outstanding payments are not settled promptly, it will lead to the unavailability of insurance coverage.
Saudi Arabia Direct PIA Flights
This, in turn, would result in the complete suspension of PIA operations. It is imperative to address the payment obligations promptly to ensure the continuous functioning of the airline.
Adding to the growing list of concerns, IATA issued a final warning last week, urging PIA to settle its outstanding dues of $2.8 million by June 21, 2023.
Non-compliance with this notice had severe implications, including the potential suspension of PIA’s IATA membership and consequently, the disruption of flight operations.
It is crucial for PIA to address this payment urgency promptly to maintain its membership status and ensure the uninterrupted continuity of its flights.
With considerable effort, the payment was finally made on June 23, 2023. However, if the persisting cash flow problem persists, there is a high likelihood of this situation resurfacing in the near future.
It is crucial to address the underlying cash flow issues to prevent a recurrence of such challenges and ensure a sustainable financial position moving forward.
In a recent development, the ECC has granted approval for the release of Rs. 4 billion towards pending claims on account of markup until June 2023. However, it is important to note that this approved amount falls significantly short of the total demand of Rs. 22 billion.
As a result, there remains a looming possibility of the suspension of PIA flight operations in the coming days. Urgent attention and decisive measures are necessary to address this shortfall and ensure the uninterrupted continuation of PIA’s flight services.
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On Wednesday, Prime Minister Shehbaz Sharif announced the formation of a high-level committee chaired by Ishaq Dar. The primary objective of this committee is to undertake the task of restructuring, reformation, and revival of PIA.
This initiative signifies the government’s commitment to address the challenges faced by the airline and work towards its comprehensive revitalization and improvement.
The committee will include the participation of Railways and Aviation Minister Khawaja Saad Rafiq, Planning Minister Ahsan Iqbal, Commerce Minister Syed Naveed Qamar, Special Assistant to the Prime Minister Jahanzeb Khan, and the Secretary of Aviation.
This diverse and esteemed group will collaborate to contribute their expertise towards the restructuring, reformation, and revival of PIA.
The inclusion of these individuals underscores the government’s commitment to a comprehensive and well-rounded approach in addressing the challenges and charting a path towards the airline’s recovery.
The committee will engage in thorough discussions and considerations to explore various options for the restructuring and revival of PIA. They will deliberate on strategies and measures that can effectively address the challenges faced by the airline and pave the way for its successful revival.
The aim is to devise a comprehensive plan that encompasses all aspects necessary to rejuvenate and strengthen PIA’s operations and ensure its long-term sustainability.
The Aviation Minister provided a briefing to the Prime Minister regarding the proposed route map and the reformative measures aimed at uplifting the national flag carrier, PIA.
The Prime Minister expressed his appreciation for the minister’s diligent efforts in spearheading the revival of PIA.
The acknowledgment of the minister’s dedication underscores the government’s recognition of the importance of revitalizing and strengthening the airline for the benefit of the nation.
The Prime Minister expressed his belief in the potential of PIA to overcome its financial losses. He recognized the capacity of the national flag carrier to effectively address the challenges and work towards achieving profitability and sustainability.
This positive outlook highlights the government’s confidence in PIA’s ability to navigate through the difficulties and emerge stronger in the future.
During the meeting, it was emphasized that in order to navigate PIA out of the crisis, the fleet size would need to be expanded from 27 to 49 aircraft. This strategic decision aims to strengthen the airline’s operations and enhance its capacity to overcome the challenges it faces.
By increasing the number of planes in the fleet, PIA can improve its service capabilities and position itself for sustainable growth in the future.
Prime Minister Shahbaz highlighted those irresponsible statements made by the previous government had resulted in the loss of Europe and US routes for PIA, causing a substantial financial setback amounting to billions of rupees.
He emphasized the detrimental impact of these actions, which not only affected the airline’s operations but also incurred significant monetary losses.
This acknowledgment underscores the need for responsible decision-making and strategic measures to regain and secure crucial international routes for PIA’s future success.