Pakistan’s state airline grounds flights over unpaid fuel bills

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Pakistan’s embattled national airline carrier this week cancelled dozens of domestic and international flights because it could not afford to pay its fuel bills, officials said Wednesday.

State-run Pakistan International Airlines (PIA), long accused of being bloated and poorly run, has found funds drying up as the government struggles with a balance of payments crisis caused by crippling debt repayments.

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Athar Awan, a deputy spokesman for PIA, said 48 international and domestic flights were cancelled on Tuesday and Wednesday “due to non-availability of fuel”.

“The reason for the disruption in fuel supply is non-payment of dues because PIA is facing a financial crisis and cannot pay the dues to Pakistan State Oil on time,” a PIA official speaking on condition of anonymity told AFP.

Decades of mismanagement and instability have hobbled Pakistan’s economy, and this year Islamabad was forced into yet another bailout from the International Monetary Fund (IMF) to avert default.

The interim government has said it will sell off the airline as part of a wider privatization plan for state-run companies.

“The process of privatization for the national airline should be made more transparent and expedited to prevent further financial losses to the national exchequer,” caretaker Prime Minister Anwaar-ul-Haq Kakar said in a statement last week.

A senior official at Pakistan State Oil (PSO) said the state-owned fuel supplier was “providing fuel for only flights that PIA has prioritized”. He, too, was speaking on condition of anonymity.

PIA had agreed this week to pay the oil firm 100 million Pakistani rupees (around $360,000) every day to cover its dues, the PSO official said.

“On Wednesday PSO received a payment of 150 million rupees in return 26 flights were refueled”, the official added.

In a statement, the airline said it expected normal service to resume from Thursday, after it paid for fuel “from its own resources”.

The airline did not provide further details.

Bloomberg has previously reported that PIA had liabilities of 743 billion rupees (around $2.5 billion), exceeding its total assets by five times.

PIA came into being in 1955 when the government nationalized a loss-making commercial airline and enjoyed rapid growth until the 1990s.

The airline’s reputation was also battered by a series of strikes, hijackings, and accidents, including the crash of an Airbus in Karachi in May 2020 that killed 97 passengers and crew.

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