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

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1 year ago

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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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Business

Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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2 days ago

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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Business

SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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2 days ago

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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