ISLAMABAD: The government turned down on Friday a Rs20 billion bailout package requested by the management of Pakistan International Airlines (PIA) to help it come out of a ‘financial crisis’.
“The government does not have the capacity to provide cash support. We can help them in loan restructuring but they will have to meet performance indicators,” Finance Secretary Dr Waqar Masood Khan said.
According to sources, the government has concluded that the prevailing crisis in the national carrier is because of ‘mismanagement’ and ‘bad governance’ and not financial shortcomings.
The sources said that Prime Minister Yousuf Raza Gilani and President Asif Ali Zardari took notice of PIA’s deteriorating condition and called its chief to give him strict instructions for bringing improvement in the airline’s affairs.
They said nine of the 39 PIA planes had been grounded because of some ‘erroneous decisions’ of the management, including an agreement with a US firm, Transworld, for the supply of spares, food items and other material.
An official told Dawn that a team of PIA officers met Prime Minister Gilani on Thursday and sought the bailout package. However the team was warned by the premier that “an attitude of business as usual is unacceptable”.
The prime minister also constituted a committee led by Finance Minister Dr Abdul Hafeez Shaikh and comprising Cabinet Secretary Nargis Sethi, Principal Secretary Khushnood Lashari and the defence secretary to prepare within a week a roadmap for PIA’s turnaround.
Dear visitor, the comments section is undergoing an overhaul and will return soon.