PSO offers Rs 500 mn debt relief to PIA amid financial crisis

A Taliban fighter stands guard as a PIA plane carrying passengers takes off at the airport in Kabul.  - AFP/File
A Taliban fighter stands guard as a PIA plane carrying passengers takes off at the airport in Kabul. – AFP/File
  • Monetary dispute between PIA and PSO has been resolved.
  • PIA flight services remained disrupted for the last 2 weeks.
  • The decision came after a meeting of senior officials on October 16.

KARACHI: Pakistan State Oil (PSO) has provided an additional loan of Rs 500 million to Pakistan International Airlines (PIA), which will enable the national airline to gradually resume its flight operations.

according to a news In a report published on Sunday, a PIA spokesperson said, the monetary dispute between the above two entities has been resolved, paving the way for an increase in fuel supply to the airline company in the near future.

Over the past two weeks, PIA’s flight services were significantly disrupted, resulting in the cancellation of around 375 international and domestic flights. The disruption was caused by a decision by the state oil company to reduce fuel supplies to the state-owned air carrier following outstanding dues.

PIA defaulted on payments made to the PSO and the state oil company was supplying fuel after receiving advance payment. The national airline adjusted its flight operations according to fuel supplies over the past two weeks, leading to the cancellation of many scheduled flights.

On the other hand, PSO said it has not suspended fuel supply to PIA despite short payment by the carrier against the supply. “PIA was given a credit limit of Rs 15 billion, which has already been exhausted,” the PSO said.

The state-owned oil company said it is currently facing financial difficulties due to trade receivables amounting to Rs 765 billion. She is in talks with PIA to find a viable solution to deal with this problem. It said that despite PIA owing Rs 26.8 billion as of October 26, the PSO is making efforts to supply fuel to the national carrier.

A meeting between senior officials of both state-owned organizations was held on 16 October to determine the course of action.

As per the understanding, PSO was to supply fuel to PIA, subject to payment against flight-wise priority, from October 16 to October 26. To further support the national carrier, PSO has increased the loan facility to Rs 500 million after another round. The meetings took place on October 27, the PSO said.

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