Saudi Arabia's General Authority of Civil Aviation (GACA) has demanded that Pakistan International Airlines (PIA) settle its outstanding dues of $48 million to avoid potential suspension of operations, including Hajj flights, as reported by sources familiar with the matter. Finance Minister Ishaq Dar revealed this during an economic coordination meeting held recently.

The GACA has further warned that repatriation of the fifty thousand Hajj pilgrims will not commence until the outstanding payments are made. The economic coordination meeting also highlighted the PIA's financial challenges, with pending claims totaling PKR 22 billion and a release of only PKR 4 billion by the Economic Coordination Committee (ECC) for markups until June 2023.

In addition, it was disclosed that AerCap, a lessor of PIA, had impounded a B-777 aircraft in Kuala Lumpur last month, which was later released after the Pakistan government made the overdue payment through the International Air Transport Association (IATA) clearing house.

Pakistan Prime Minister Shehbaz Sharif announced the formation of a high-level committee, chaired by the finance minister, to address the restructuring, reformation, and revival of PIA. The committee includes Aviation Minister Khawaja Saad Rafiq, Planning Minister Ahsan Iqbal, Commerce Minister Syed Naveed Qamar, and the Special Assistant to the Prime Minister, along with the Secretary of Aviation.

Furthermore, PIA is currently facing legal action in the US from Willis Leasing due to non-payment, leading the airline to remove and return two A-320 aircraft engines leased from them. Alliana, PIA's insurance broker, has also issued a termination notice and demanded overdue payments, which could impact flight operations once the insurance coverage ceases.

Moreover, PIA's IATA membership was at risk due to outstanding dues of over $2.8 million, with a payment deadline of June 21. The payment, however, was made on June 23 to avoid any consequences.

Despite the challenging circumstances, the government has tasked PIA with increasing its fleet from 27 to 49 aircraft, with hopes that this expansion will help the airline overcome the ongoing crisis.

Image source: Reuters