CAA seeks government help to recover dues against airlines

[Abbas Ali]

BY IQBAL MIRZA

KARACHI (April 25 2006): The inaction of the concerned government authorities has resulted in burgeoning of Civil Aviation Authority's (CAA) dues against the private sector airlines and the national carrier, Pakistan International Airlines (PIA).

The issue of over dues, which the carriers dispute, could only be resolved through a meaningful government intervention. Except for Airblue, the other private sector carriers owe around Rs300 million, while PIA alone owes Rs 3,819 million (Rs 3,110 million in 2004). Airblue Commercial Director Syed Nasir Ali said that the airline was current on all its payments to the CAA, including housing and landing charges and for not operating on socio-economic routes.

According to PIA's 2005 annual report, which will be presented at the annual general meeting on Wednesday (April 26), the CAA has claimed additional amounts, aggregating to Rs 3,819 million. This amount is in respect of rent and allied charges, landing and housing charges, aviation security and bay charges, interest/surcharge etc.

The matter has been referred to the Ministry of Defence through which a reconciliation of settlement exercise is currently in progress.

The PIA management considers that no additional liability of material amount is likely to arise as a result of such exercise. Accordingly, no provision in this respect had been made in the financial statements, the annual report said.

Under the head of contingencies and commitments, the annual report also touched on the issue of duties levied on tickets. The Collector, Central Excise, had raised demand of Rs 1,126 million (Rs 1,059 million in 2004) in respect of duties levied on tickets provided by the corporation to its staff either free of charge or at concessional rates.

Further, repair/replacement of re-imported aircraft engines, non-availability of invoices, import related to miscellaneous consignments, printed material sent to its various stations abroad for utilisation, late/short payment of sales tax and central excise duty and excess baggage tickets.

On protest by the Collector, Central Excise, the corporation has already paid Rs 100 million that is considered fully recoverable by the management. The corporation has filed appeals with the Customs, Central Excise & Sales Tax Tribunal, which are pending adjudication.

The management is confident that the decision would be made in the corporation's favour.

The corporation is also contesting litigation relating to suits filed against it on dispute over throughput charges, aggregating to Rs 125 million (Rs 92 million in 2004) against which it has filed appeals with the High Court of Sindh, Karachi, and the district court, which are pending.

Source: Business Recorder