Pakistan's airlines fail to pay fuel bills, grounding dozens of flights

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Officials said on Wednesday that Pakistan's national airline has canceled dozens of domestic and international flights this week due to non-payment of fuel bills.

Pakistan International Airlines (PIA), which has been accused of poor management for a long time, has said that it is facing a balance of payments crisis due to debt repayment problems.
PIA Deputy Spokesperson Athar Awan informed that 48 international and domestic flights were canceled on Tuesday and Wednesday.

Another PIA official told AFP on condition of anonymity that 'the reason for the interruption in fuel supply is non-payment of dues as PIA is facing financial crisis and is not able to pay dues to Pakistan State Oil on time.

Decades of mismanagement and instability have crippled Pakistan's economy, and this year Islamabad was forced to negotiate another deal to repay a loan from the International Monetary Fund (IMF).
The interim government said it would sell the airline as part of a wider privatization plan for state-run companies.

Acting Prime Minister Anwar-ul-Haq Kakar issued a statement last week and said, 'The process of privatization of the national airline (airlines) should be made more transparent and expedited to prevent further financial loss to the national treasury.'

A senior official of Pakistan State Oil (PSO) said on condition of anonymity, 'The government-owned fuel supplier is providing fuel only for PIA's priority flights.'

According to a PSO official, this week PIA agreed to pay 100 million Pakistani rupees (about 360,000 US dollars) per day to the oil company to pay its dues.

"On Wednesday, the PSO received a payment of 150 million baht, in return for fueling 26 flights," said the official.
The airline said in a statement that it expects to resume normal service from Thursday after paying the fuel price 'from its own source'.

The airline did not provide further details. Bloomberg had previously reported that the PIA had a liability of 743 billion baht (about 2.5 billion US dollars).

PIA came into existence in 1955 after the government nationalized loss-making commercial airlines and enjoyed rapid profits until the 1990s.

In May 2020, the airbus crashed in Karachi, killing 97 passengers and crew members, as well as a series of strikes, hijackings and accidents, the reputation of the airline was damaged.

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