Government turns down PIA’s bailout package

The government of Pakistan has rejected the bailout package worth Rs. 20 billion requested by the Pakistan International Airlines (PIA) to help out the national carrier from its financial crisis.

Amidst severe financial crisis, a bailout package was asked by PIA last month, which was eventually turned down on Thursday, on the basis that the government itself is suffering from financial constraints and is in no position
to help out PIA in terms of cash.

The government official told the press reporters that PIA can be assisted in loan restructuring but the government can’t provide any cash to the company.

“The government does not have the capacity to provide cash support. We can help them in loan restructuring but they will have to meet performance indicators,” Finance Secretary Dr Waqar Masood Khan said.

Sources further told that the government believes that PIA is suffering such serious crisis due mismanagement and bad governance, rather than lack of finance. The airline has been poorly managed and needs some vast reforming to
smooth out its problems.

The Prime Minister of Pakistan, Sayed Yousuf Raza Gilani, and the President, Asif Ali Zardari, have taken the notice of PIA’s exacerbating conditions themselves. The PIA chief was summoned and was given strict instructions to bring
reviving improvements in the airline’s affairs as soon as possible.

The national carrier has been led down by a number of successive erroneous decisions by the incompetent manage, which has finally brought down the company to such worrying conditions. Such poor decision making included the grounding
of 39 of the PIA planes management’s orders and an agreement with Transworld, a United States firm, for the supply of spares, food items and other material.

The government official further told that an officers delegation from PIA came to meet the Prime Minister Gilani on Thursday to sought out the bailout package but was given strict warnings instead. The PIA officers were instructed
by Gilani to be efficient in performing their duties and an attitude of business as usual will not be tolerated in the future.

Gilani immediately constructed a committee, headed by the Finance minister, Dr. Abdul Hafeez Sheikh and other senior cabinet members, to prepare a turnaround road map for PIA in a week’s time.

Short URL: https://www.newspakistan.pk/?p=2900

Posted by Farhan Hameed on Nov 5 2011. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry