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Boeing, Airbus ‘likely to suspend’ spare parts supply to PIA amid liquidity crunch

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  • PIA grounds 5 out of 13 leased aircraft due to cash-flow crisis.
  • PIA says keeping airline operational necessary for privitisation.
  • ECC rejects PIA summary seeking emergency bailout.

The Pakistan International Airlines (PIA) has warned that Boeing and Airbus are likely to suspend the supply of spare parts by mid-September as the national flag carrier faces “serious cash flow problems”.

In a summary sent to the Economic Coordination Committee (ECC) for an emergency bailout, PIA said it was unable to pay its creditors, aircraft lessor, fuel suppliers, airport operators, International Air Transport Association (IATA), and others due to a liquidity crunch.

The national flag carrier further said it was forced to ground five out of 13 leased aircraft, while four additional aircraft are likely to be grounded this week due to the prevailing crisis.

In the summary, PIA also highlighted that keeping the state-run airline operating is necessary to determine the fair price of its shares for privatisation.

Meanwhile, the ECC meeting on Wednesday rejected the PIA demand for the provision of Rs22.9 billion and deferment of Rs1.3 billion per month to the Federal Bureau of Revenue (FBR) as well as loans and markup amount till the finalisation of the restructuring plan.

During the meeting, the Ministry of Aviation submitted a summary on “Financial support for PIACL & its Restructuring”.

The secretary of Aviation gave a detailed briefing to the chair about the financial burdens, liabilities of PIA, and the need for restructuring the organisation.

The ECC discussed and reviewed the timelines and costs of the restructuring plan. After detailed discussion and deliberation, it was decided to constitute a separate committee for the assessment of PIA’s restructuring plan.

The ECC also rejected the request for deferment of the payments of Rs1.3 billion per month, which PIA pays to FBR against Federal excise duty (FED), and Rs0.7 billion per month which PIA pays to the Civil Aviation Authority (CAA) against embarking charges.

It was also decided that the Finance Division and State Bank of Pakistan would support PIA in tackling its financial challenges after a concrete plan for restructuring the airlines had been finalised and submitted to the satisfaction of the committee.

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Islamic Sukuk Bonds: Government Is Expected To Begin Bond Auction Next Week

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There is now more positive economic news for the people of Pakistan. The government is anticipated to begin the Sukuk Islamic Bond auction next week, after the central bank’s announcement of a large drop in the policy rate.

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SIFC Encourages Green Tourism: Reforming Visas to Increase Investment

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Enhancing investment in the tourism sector, Green Tourism Pakistan’s initiative has received backing from the Special Investment Facilitation Council.

Visa-On-Arrival for 126 countries, Visa-Free Entry for Gulf Cooperation Council nations, and 24-hour expedited visa processing are some of the main features of the Green Tourism Visa Policy.

It is anticipated that these endeavors will draw in about 80 million dollars in foreign direct investment and 8.3 billion rupees in domestic investment.

Green Tourism Private Limited has introduced hunting resorts in Naltar, Hunza, and Skardu, along with four- and five-star city hotels, to improve the tourism experience.

In the first phase of the project, 17 of the 78 areas have seen the start of development activity.

Approved is a central authority for Green Tourism that will supervise the growth of Air Operations.

To promote Religious Tourism, extra precautions have been taken to guarantee the security of visitors from all religions, including Sikhs and Buddhists.

Furthermore, in order to improve the quality of the tourist experience, the green guide quality program has been introduced to supply top-notch tour guides.

There is now a deluxe bus excursion from Islamabad to Peshawar that promotes local culture.

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July 2024 export data from Pakistan shows a significant rise.

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The Strategic Investment Facilitation Council (SIFC) has been instrumental in improving Pakistani products’ access to international markets, as seen by the significant surge in exports from the country at the start of the 2024–25 fiscal year.

With a 7.26% rise over the same month the previous year, July 2024 exports to the US were $476.017 million. After increasing by 7.74% annually, the United Arab Emirates emerged as the second-largest export destination.

The third and fourth places were occupied by exports to the UK ($183.303 million) and China ($60.100 million). A substantial increase in exports to Afghanistan was recorded in July of this year, rising from $46.262 million to $88.065 million, largely due to successful anti-smuggling efforts.

With a combined export volume of $553.951 million, more important export destinations included Germany, the Netherlands, Italy, Spain, Saudi Arabia, and Turkey.

A bright future for the national economy is suggested by the growing confidence major international markets have in Pakistani exports. Through the efforts of SIFC and the government, this greater access to global markets has been made possible.

Pakistan’s economy is predicted to remain stable as a result of the export growth that SIFC has enabled.

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