Accumulated losses touch Rs 11 billion: Finance Ministry to help
raise Rs 20 billion under emergency PIA rescue package
.......ISLAMABAD : The government on Wednesday approved an emergency package of financial and administrative
measures for PIA to salvage the national flag carrier from a severe financial crisis. This decision was taken during a
presentation given to the Chief Executive by the new management of the airline.
.......The meeting was informed that PIA had already suffered a loss of nearly rupees two billion in the first six months
of the current year with accumulated losses being nearly Rs 11 billion.
.......Under the rescue package, PIA would work with the Ministry of Finance to raise Rs 20 billion to meet its financial
liabilities and maintain its operational requirements.
.......The presentation also highlighted the decade of mismanagement and maladministration of the airline due to
political interference, causing financial and administrative in-discipline. The gross mismanagement propelled by
political interference of the 1990s brought the airline to its present critical stage, the meeting was informed.
.......The administrative measures include restoration of the amendment to the PIAC Act made in 1984, relating to
suspension of activities by unions and associations. It was, however, decided not to retrench the employees and
efforts will be made to enhance employees' productivity and efficiency.
.......The package approved for the airline includes linking up of much needed funds to keep the cash strapped airline
flying. The rescue measures also include readjustments of international and regional routes, introduction of new flights,
linking of domestic fares with fuel prices and rationalisation of fares for some of the socio-economic routes being
operated by PIA despite heavy losses. These measures have been wrapped up in a new business plan, which aims at
eliminating losses, reducing expenditure and increasing revenues. The new business plan projects a breakeven
situation within a year followed by gradual but steady increase in profits to the subsequent years.
.......Under the new administrative and financial measures, PIA would also outsource most of its non-airline functions,
including operation of the flight kitchens, maintenance of motor transport ground handling and security services.
.......The presentation was also attended by the Federal Minister for Finance, Commerce, Privatisation, the Deputy
Chairman, Planning Commission, Secretary General Finance, Secretary Defence, Managing Director, PIA and other
.......Copyright 2001 Business Recorder (http://www.brecorder.com)
What is your opinion on this? I mean, in reality, it is a very small amount.
20,000,000,000 Pakistan Rupee = 324,201,660.64554 US Dollar