ISLAMABAD –Pakistan International Airlines (PIA) is facing a severe financial crunch, with its debt reaching around Rs 250 billion, from Rs 125 billion during the financial year 2013-14.
According to Jang newspaper, the annual deficit of national airline has surged to Rs 40 billion, from Rs 27 billion during financial year 2013-14, despite the fact that current petrol prices are significantly lower. During 2013-14, petrol prices ranged between Rs 110 and Rs 120 per litre, whereas the present price is around Rs 70 per liter.
Reducing the deficit will enable PIA to provide its passengers better services as well as to invest in the maintenance of its fleet.
The government will have to invest as much as $1 billion in the national flag carrier in order to arrest the decline. However, it is not possible for the government to provide such a large amount in a single installment.
Other options to reduce the deficit include privatization of the state-owned airline, or significant layoffs in redundant staff.
It is important to mention here that the government could earn revenue of around $800 to $1000 million through a transparent auction of two hotels owned by the PIA, namely Road Wallet located in New York and Scrib Hotel situated in Paris. The revenue would prove helpful to rehabilitate the flag carrier.