Business

PIA cancels scores of flights as paucity of funds ‘weighs’ on operations

Published

1 year ago

Farwa

KARACHI: The operations of Pakistan International Airlines (PIA) were severely affected due shortage of funds with a number of domestic and international flights being cancelled, sources told Geo News on Tuesday.

The sources further said that a number of domestic flights to and from Karachi were cancelled as the national flag carrier failed to pay Pakistan State Oil (PSO) for fuel supply.

A number of flights have been called off including two Karachi-Muscat, and two-way domestic ones from Karachi to Faisalabad, Islamabad and Lahore, according to sources.

Similarly, fights from Karachi to Turbat, Bahawalpur, and Sukkur have also been scratched, airline sources said.

The insiders said the national flag carrier has requested the government for immediate provision of funds.

Moreover, the sources said the PIA employees had also not been paid their salaries as well.

A PIA spokesperson in a statement said management is in touch with the Ministry of Finance and the salaries of the employees will be paid as soon as the funds are received.

A day earlier, Geo News citing sources reported that the PIA risks grounding 15 planes amid a significant financial crisis due to growing dues owed by the national carrier.

According to well-placed sources privy to the development, PIA has to clear dues worth up to Rs20 billion. Any delay in timely payment of the dues pertaining to fuel, federal excise duty (FED) and lease payments, might lead to 15 planes being grounded.

More than 30 national flights will be suspended if the planes are grounded, the sources had added.

Meanwhile — commenting on the dire situation — the Ministry of Aviation said that overhauling the PIA is a “complicated” process and will take a year. However, during this time it is imperative to keep the airline operational.

Last week, the national carrier announced the “easing” of its financial challenges following the release of critical funds by the banks as a result of support from the government of Pakistan.

“The funds shall be used to clear long-standing dues of aircraft and engine leases, spare support and handling payments at foreign stations. Restructuring is also on track,” the national carrier said.

PIA’s financial woes

On September, the PIA had said it grounded five out of its 13 leased aircraft with further prospect of grounding four additional plane due to the prevailing financial crunch.

The PIA had asked for an emergency bailout of Rs22.9 billion which was rejected by the Economic Coordination Committee (ECC).

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

The airline had also warned that Boeing and Airbus might suspend the supply of spare parts by mid-September.

Last month, the FBR froze 13 PIA bank accounts due to non-payment of Rs8 billion in FED.

Business

Remittances Increase 25.2% in January 2025: $3.0 Billion Inflow

Published

7 hours ago

Farwa

Remittances from Pakistani workers totalled US$3.0 billion in January 2025, representing a 25.2% increase from the previous year.

The cumulative remittances for July through January of FY25 were 20.8 billion dollars, up 31.7 percent from 15.8 billion dollars during the same period in FY24.

In January 2025, the United States of America contributed 298.5 million dollars, the United Kingdom contributed 443.6 million dollars, the United Arab Emirates contributed 621.7 million dollars, and Saudi Arabia contributed 728.3 million dollars.

Business

In January, Pakistan’s remittances rose by 25%.

Published

7 hours ago

Farwa

In January 2025, Pakistan had a notable 25% growth in domestic remittances, with inflows hitting a record $3 billion for the month.

In a post on X, Khurram Shahzad, advisor to the Federal Finance Minister, revealed the most recent data, showing a sharp increase in remittances. The overall amount of remittance inflows from July 2024 to January 2025 was $20.8 billion, which is a 32% increase from the previous year.

According to official documents, the federal government’s non-tax revenue increased by Rs1,623 billion during the first half of the current fiscal year, from July to December, to Rs3,602 billion, up from Rs1,979 billion during the same period last fiscal year. The petroleum levy accounted for a significant portion of the increase, collecting an additional Rs76.64 billion, bringing the total petroleum levy revenue to Rs549 billion, up from Rs472.77 billion during the same period last year. Shahzad described the increase in remittances as a positive development for Pakistan’s economy and external accounts, and he projected that if this trend continues, annual remittances could surpass $35 billion by the end of the fiscal year.

Significant non-tax revenue was also generated by the State Bank of Pakistan (SBP), which reported a profit of Rs2,500 billion from July to December, a substantial increase from Rs972 billion during the same period the previous year.

Business

It is anticipated that the cost of electricity will drop by Rs2 per unit.

Published

7 hours ago

Farwa

In an effort to help consumers, the government is attempting to lower electricity costs nationwide.

A task team has started negotiating with 45 more power facilities to reduce electricity rates, according to Ministry of Energy sources.

According to the plan, the profit margin of about 25 state-owned power plants will be cut from 19% to 13%, which will result in an electricity tariff drop of 50 paisa per unit. Moreover, rather than total production capacity, these power plants will now get compensation based on actual electricity generation.

It is anticipated that these actions will result in a Rs2 per unit drop in the overall electricity bill. The task force’s suggestions will probably be brought up for approval in the upcoming cabinet meeting.