Pakistan's national carrier seeks $75 million bailout package from government

The Pakistan International Airline (PIA) is seeking approximately $75 million as a bailout package from the interim government in order to continue its services amidst a massive debt crisis, according to The Express Tribune report.

As per the report, the demand, which was made from the Pakistan interim set-up, has not been accepted yet.

Despite releasing funds, the interim set-up has urged for the management of Pakistan's national carrier to design a feasible restructuring plan.

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The Express Tribune, citing people familiar with the matter, reported that the PIA management met with caretaker Finance Minister Dr Shamshad Akhtar and sought the financing. However, the airline could not immediately win the bailout package.

According to the news daily reports, the PIA is the country's most heightened public sector loss-making commodity and subsequent governments have been giving out money from the budget to keep it buoyant.

Regardless, there isn't any plan to install professional management and the affairs of the PIA are entrusted to Air Force officers, who do not have experience in handling operations and running a commercial airline.

The management of the Pakistan International Airline (PIA) informed the caretaker finance minister in the meeting that there was a financing gap of Rs 23 billion.

However, the finance ministry asked the PIA management to arrange Pak currency Rs 13 billion in funds from the banks against the available space of the annual sovereign guarantees limit.

The government, in the last fiscal year, increased the limit of the sovereign guarantees to over Rs 263 billion for taking more loans to maintain a steady position.

If the PIA fails to service its debt, the banks have the option of cashing these sovereign guarantees.

(With inputs from agencies)

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