PIA – Pakistan International Airlines (PK, Karachi Int’l) has secured a PKR20 billion rupee (USD17.3 million) guarantee from the state Economic Coordination Committee for the overdue engine maintenance of its Boeing B777 fleet but was denied an additional guarantee to cover interest on legacy debts, Pro Pakistani has reported.
The carrier had earlier assumed in its business plan that it would secure a PKR100 billion rupee guarantee from the state for the next five years which would allow it to obtain a commercial loan to pay interest on legacy debts. PIA pays some PKR18 billion rupees in interest per annum.
The ECC has rejected the application as it has negatively assessed the current business plan of the heavily indebted and loss-making airline. Over the last 17 years, the carrier has cumulatively lost over PKR360 billion rupees. It has also not posted a net profit since 2002.
“(The) Aviation Division and the Finance Ministry will ensure that the financing support approved by the ECC is strictly utilized only for the defined purpose,” Prime Minister Shahid Khaqan Abbasi has said after the ECC’s meeting.
The guarantee obtained from the ECC would enable the carrier to take out loans and perform overdue maintenance on its fleet of twelve B777 aircraft. According to Flightradar24 ADS-B data, three out of these are currently grounded, including B777-200(ER) AP-BGJ (msn 33775) grounded since May 2, B777-200(LR) AP-BGY (msn 33781) – since May 4, and B777-300 AP-BHV (msn 33778) – since February 9.
Separately, the Supreme Court of Pakistan has temporarily barred the carrier from rebranding and applying a new livery, The Express Tribune has reported. The Chief Justice of Pakistan Mian Saqib Nisar has asked the airline to first provide a report and raised doubts regarding the costs of the rebranding, as well as the way contracts were awarded and the impact that the repainting of the aircraft would have on PIA’s on-time performance.
According to PIA, repainting each of its planes would cost around PKR2.7 million on average.