Clear Dues: Saudi Warns of Ban on Hajj Flights and Threatens to Clip Pakistan State Airline’s Wings

The Pakistan International Airline (PIA), the country’s flag carrier, was urged by the Saudi General Authority of Civil Aviation (GACA) to settle $48 million in unpaid debts in order to continue operating, including Hajj flights.

The GACA also cautioned that unless the funds are fulfilled, the return of the 50,000 Hajj pilgrims will not begin. The disclosures, according to those acquainted with the situation, were made by the finance minister Ishaq Dar this week at the meeting for economic coordination.

Since the ECC only released PKR 4 billion of the PKR 22 billion in outstanding claims on account of markup up to June 2023, the severely mismanaged Pakistani state airlines may potentially go out of business.

Additionally, it was disclosed that the PIA’s lessor, AerCap, had its B-777 aircraft seized at Kuala Lumpur last month. After the Pakistani government paid the late amount and submitted the PIA receipts via the clearing house of the International Air Transport Association (IATA), it was made available.

The reorganization, reformation, and rebirth of the PIA would be worked out by a high-level committee headed by the finance minister, according to Pakistan’s Prime Minister Shehbaz Sharif on Wednesday.

The committee is made up of the aviation minister Khawaja Saad Rafiq, the planning minister Ahsan Iqbal, the commerce minister Syed Naveed Qamar, the special assistant to the PM, and the secretary of aviation.

Willis Leasing has also filed a case against the PIA in the US for non-payment. The PIA are removing and returning the two A-320 airplane engines they leased from them in order to prevent any more negative consequences. Additionally, PIA insurance broker Alliana sent a termination notice, demanded late payments, and warned that if insurance ceases, airline operations would also cease.

The PIA’s IATA membership was also in jeopardy since it owed over $2.8 million in unpaid dues. The payment deadline was June 21. On June 23, the payment was completed.

Despite its difficulties, the government has also given the PIA the job of expanding its fleet from 27 to 49, which it thinks would help the airline get out of its current predicament.