ISLAMABAD, Feb 26: Eighteen days before the end of its term, The government approved on Tuesday a record Rs100 billion bailout package for the ever-bleeding Airlines. The committee approved an “interim business plan” presented by the PIA management for five years.
The bailout package will allow the Ministry of Finance to issue fresh guarantees of Rs49 billion during the current year to help the airline cope with its liquidity problems.
The committee decided to ask the Ministry of Defence to arrange payment of $46 million by the Ministry of Finance with or without government guarantees to enable PIA to acquire five narrow-bodied aircraft to replace its ageing fleet.
It approved a proposal to extend loans and guarantees of Rs33.5bn till June this year and allowed the airline to borrow Rs13.5bn from the National Bank of Pakistan against a letter of comfort to be subsequently replaced by federal government
The committee stated that the measures would help PIA to achieve fuel efficiency through fleet modernisation, optimum fleet deployment on network, introduction of additional frequencies on high-demand high-yield routes, enhance revenue and increase its market share, separate the core airline business activities from non-core activities and restructure its liabilities to reduce its financial cost.