Business

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

Published

1 year ago

Farwa

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.

Business

February 7, 2025: The value of the Pakistani Rupee (PKR) in relation to the US dollar is unchanged.

Published

2 days ago

Farwa

KARACHI: The open market exchange rate between the US dollar and the Pakistani rupee (PKR) was Rs279.4 on February 07, 2025, with a selling rate of Rs281.1. The interbank exchange rate between the US dollar and the Pakistani rupee is Rs 278.45, according to Interbank.

There was no movement in the US dollar (USD) from the previous closure of Rs278.

Business

The NORINCO Group is invited by CM Sindh to explore opportunities.

Published

3 days ago

Farwa

Chinese companies have been invited by Sindh Chief Minister Syed Murad Ali Shah to visit Karachi and other regions of Sindh Province in order to observe the quickly growing businesses and investigate prospects in fields like clean energy, infrastructure development, and public transit projects.

Speaking in Beijing to a delegation headed by the chairman of NORINCO International Co., Ltd., he stated that all facilities required would be provided by the governments of Sindh Province and Pakistan.

With assistance from NORINCO International, the Sindh Chief Minister stated that the Provincial Government will firmly urge North Vehicle and BeiBen to think about setting up a Vehicle Assembly Plant in the Dhabeji Special Economic Zone.

Business

A deal with Pakistan to fight financial crimes has been approved by the Saudi cabinet.

Published

3 days ago

Farwa

In order to strengthen collaboration in the fight against money laundering, terrorist financing, and associated crimes, the Saudi Press Agency announced this week that the Saudi cabinet, led by Crown Prince Mohammed bin Salman, had approved a memorandum of understanding (MoU) with Pakistan’s Financial Monitoring Unit (FMU).

Due to its severe money laundering and terrorism funding issues in recent years, Pakistan was added to the Financial Action Task Force’s (FATF) grey list in June 2018.

The nation was taken off the gray list in October 2022 after enacting extensive measures to fortify its financial system.

The FMU is Pakistan’s financial intelligence unit, created under the Anti-Money Laundering Act of 2010 and tasked with collaborating with foreign partners and evaluating reports of suspicious transactions.

According to the SPA, “the cabinet approved a memorandum of understanding regarding cooperation in exchanging investigations related to money laundering, terrorist financing, and related crimes between the Financial Monitoring Unit in the Islamic Republic of Pakistan and the General Department of Financial Investigation at the Presidency of State Security in the Kingdom of Saudi Arabia.”

The MoU is an indication of Saudi Arabia and Pakistan’s growing strategic partnership. A significant Pakistani diaspora resides in the Kingdom, and numerous Pakistani businesses have established a presence there.

Saudi Arabia has been a key supporter of Pakistan’s economy, bolstering its reserves with substantial deposits in the State Bank of Pakistan and offering deferred oil payment facilities.