As per the Quarterly Report for FY19 of the Special Section, PIA has been incurring losses since 2000, with the exception of the years 2002, 2003, and 2004. The government has been injecting substantial funds year after year to cover PIA’s losses. Last year, the enterprise reported a staggering loss of 97.23 billion rupees, as reported by Profit by Pakistan Today.
Sources have informed Geo News that PIA may be forced to suspend its operations if it doesn’t receive an emergency fund of 23 billion rupees. PIA has requested a 22.9 billion rupee emergency bailout, which was, unfortunately, rejected by the Economic Coordination Committee (ECC). The ECC also turned down the proposal to defer the payment of 1.3 billion rupees per month, which PIA owes to FBR as Federal Excise Duty. Additionally, the request for 0.7 billion rupees, which PIA pays to the Civil Aviation Authority (CAA), was also rejected. Last month, FBR took the drastic step of closing 13 PIA bank accounts due to the nonpayment of 8 billion rupees in federal excise duty.
The situation surrounding PIA has been tumultuous for over two decades, and the government’s attempts to stabilise it have fallen short. There are growing rumours that the government is contemplating privatisation as a potential solution. While this move may prevent the enterprise from a complete shutdown, it could have adverse public consequences. Privatisation may lead to a monopoly, potentially resulting in higher costs for the public.
However, maintaining the status quo with the current condition of PIA is also not a viable solution. It is deeply concerning that, despite more than two decades, the government has been unable to rescue the enterprise from the burden of losses. According to the Economic Triage report from the Finance Division, PIA ranks among the top ten most loss-bearing enterprises in the country.
The government must revisit the structure and management of state-owned enterprises like PIA and implement effective reforms to rescue them from the abyss of financial losses. Privatisation, while an option, should not be seen as a panacea for all our problems.