17 Billion Rupees Bailout Package Approved for PIA

[Abbas Ali]

Economic Coordination Committee (ECC) meeting chaired by Finance Minister Asad Umar has approved more than 17 billion rupees bailout package for PIA.

Abbas

[Sadiq]

Th result of this upteenth bailout package in the bottomless pit of PIA will be the same as its predecessors, followed by urgency for additional bailouts.
The only solution lies in Government taking over PIA legacy loans and than make it mandatory for PIA management to run its operations from revenue earned.

[Abbas Ali]

Exact bailout package amount is PKR 17,022,000,000/- (seventeen billion twenty-two million rupees).

Abbas

[Abbas Ali]

According to news sources:

ECC meeting approved a plan for improving PIA's performance.

The seventeen billion rupees bailout package has been approved for implementing the plan to improve PIA performance.

ECC also has directed PIA management to devise long term strategy for solving airline's financial and administrative problems.

Abbas

[raza]

Is it not an old mantra:
bail-out package->to improve performance->overstaffing continues->new administration->year passes->bail-out package.....
......................to improve performance->overstaffing continues->new administration->New livery scheme->year passes->bail-out package.....
.......................to improve performance->overstaffing continues->new administration->New uniforms->year passes->bail-out package.
.....................................................................and they lived happily hereafter.

If you do a wrong multiple-times the same way, it will not turn right!

[TAILWIND]

So this was the plan??????

[Abbas Ali]

New chairman of the Pakistan International Airlines (PIA) Air Marshal Arshad Mahmood Malik reported to the ECC that he had firmed up a business plan for PIA`s revival, but the airline`s current `liquidity crisis has now reached an alarming level which may lead to grounding of its aircraft`.The ECC was told that the national flag carrier currently faced one of the most difficult situations owing to accumulated losses which resulted in a severe cash flow crisis hampering its operations due to fuel price fluctuations, steep currency depreciation and unavailability of an airworthy fleet. This was causing a `delay/default like situation` in discharging obligations to creditors, particularly aircraft lessors, fuel suppliers and other banks.

Among other things, the PIA suffered Rs2.9bn shortfall on GoP [government of Pakistan] sovereign guarantee of $126 million debt profile as of end-Sept 2018 only because of a difference in the exchange rate. The GoP guarantee was issued for the business plan at a rate of Rs110.58 per dollar in December last year that reached Rs133.50 about Rs23 per dollar loss.

Secondly, the government had allowed Rs20bn additional sovereign guarantee (translating into $181m at the exchange rate of Rs110.585 against dollar) limit in May this year for engine overhauling.

The currency depreciation to Rs133.5 a dollar last month created a $31m (Rs4.14bn) shortfall.

Thirdly, another Rs10bn was required to meet debt servicing obligations to creditors to ensure smooth operations of the PIA for another two months.

On the basis of these demands, the ECC allowed three different additional guarantees Rs2.9bn for meeting shortfall in the business plan, Rs4.14bn for engine overhauling and Rs10bn for avoiding default.

The ECC directed the PIA management to improve the airline`s business model and devise a strategic plan for solution of its financial and administrative problems on a long-term basis.

It approved a proposal for issuance of government guarantees for raising Rs17.022bn to meet immediate requirements of the PIA.

Source: DAWN

[TAILWIND]

.........
Thirdly, another Rs10bn was required to meet debt servicing obligations to creditors to ensure smooth operations of the PIA for another two months.

DOes this mean PIA would need or generate 10 bn every two months, to meet its debt servicing?

[Abbas Ali]

Cartoon in November 14 edition of English daily 'DAWN'.



Abbas

[Abbas Ali]

Cartoon in November 15 edition of English daily 'Pakistan Today'.



Abbas

[proudPakistani]

How many times , tax payer money will be used on Sinking PIA? Govt can use this money to start a new Airline with 3-4 aircrafts.

[Abdulrafeysiddiqui]

Fine. Assume PIA is no more. A new airline with 3 aircrafts have started. Now can you face and answer the thousands of employees of PIA? PALPA?

Bro, its easy to say than to perform or to act upon. Many factors can't be unseen.

[Sadiq]

In the month of May 2018, the outgoing Government of PML(N) gave a package of Rs 20 bn to PIA. Within six months another package of Rs. 17.022 bn is announced. For an organization which generates annual revenue of Rs.90 bn, the two packages are approximately 40% of the revenue.
Time for the Government to say NO MORE.

[Abbas Ali]

Finance Minister Asad Umar has said that 17 billion rupees have been given to PIA not for dumping in a dark well.

PIA will have to present its revival plan after getting 17 billion rupees, he said.





Abbas

[Abbas Ali]

Strategy to revive PIA in the works: Asad

December 29, 2018

KARACHI: Minister for Finance, Revenue and Economic Affairs Asad Umar has said that the government is preparing a grand strategy to revive Pakistan International Airlines (PIA).

Speaking to the media on Friday in Islamabad, he said that the government is committed to bring the PIA out of its current state.

He said that the state-owned entities (SOEs) are causing huge losses to the national kitty due to corruption and malpractices in the past.

However, he said that the government is committed to reviving these SOEs by rooting out the culture of corruption.

He said that the government has already provided Rs17 billion to the national-flag carrier which was approved by the Economic Coordination Committee (ECC) in November. The airline has accumulated losses of Rs356bn with total liabilities amounting to Rs406bn against assets of only Rs111bn.

Source: DAWN