PIA looking to banks for Rs7b loans to avert disruption, suspension of flight operation.

ISLAMABAD -- Pakistan International Airlines (PIA) has urgently sought additional loan amounting to over Rs7 billion to sustain its operations as the national flag carrier is grappling with severe financial issues, fuelling concerns about potential disruptions or even complete suspension of flight operations.

In order to address the growing concerns, the PIA administration has reached out to the Aviation Division, urging them to arrange an immediate loan of more than Rs7 billion from banks.

A letter dispatched to the division by the PIA mentions that the government of Pakistan's guarantee includes an option for the airline to secure a loan of Rs7.5 billion.

Interestingly, no bank has shown any interest in providing a loan of Rs5 billion to the airline due to the severe financial problems faced by the PIA.

The letter further states that due to financial issues, fuel supply in Jeddah and Dubai was halted, and the Pakistan State Oil (PSO)-the state-owned oil marketing company- also refused to supply fuel to the airline.

It says the International Air Transport Association (IATA) membership can also be suspended at any time. The Federal Board of Revenue (FBR) has also issued notices to the airline.

The letter urges the Ministry of Finance to intervene immediately and instruct banks to provide a loan of Rs7.5 billion under the government's guarantee. The letter has been sent by the General Manager Funds Management to the Deputy Director Division for necessary action.

Last month, on September 22, the caretaker privatization minister had announced that the government would not ground the PIA - its highest loss-making enterprise - and that no employee of any entity would be sacked even after its privatisation.

The statement had come hours after interim Finance Minister Dr Shamshad Akhtar said the government would give any support needed to keep the PIA in...