Saudi Arabia warns Pakistan’s PIA to pay up or face Hajj flight suspension

The Pakistan International Airline (PIA) has been warned by the Saudi Arabian General Authority of Civil Aviation (GACA) to pay $48 million in outstanding dues to avert the suspension of operations, including Hajj flights.

The GACA stipulated that repatriation of fifty thousand Hajj pilgrims would be on hold until payments are completed. This information came to light during an economic coordination meeting chaired by finance minister Ishaq Dar earlier this week.

The state-run Pakistani airline, struggling with mismanagement issues, faces the threat of closure if the ECC continues to withhold the PKR 22 billion due in markup up until June 2023. The ECC has only released PKR 4 billion thus far. Adding to the pile of troubles for PIA, AerCap, a lessor of the airline, seized its B-777 aircraft in Kuala Lumpur last month.

The aircraft was only released after the Pakistan government cleared the overdue payment and ensured PIA’s receipts through the International Air Transport Association (IATA) clearing house.

Saudi Arabia‘s GACA pressures Pakistan’s PIA to pay $48m dues amidst fears of shutdown. Photo courtesy of Anna Zvereva from Tallinn, Estonia/Wikimedia Commons.

Pakistan’s Prime Minister Shehbaz Sharif revealed plans for a high-level committee, chaired by the finance minister, to tackle the restructuring and revival of the PIA. The committee also includes the aviation minister Khawaja Saad Rafiq, planning minister Ahsan Iqbal, commerce minister Syed Naveed Qamar, special assistant to the PM, and the secretary of aviation.

The PIA faces further litigation in the US from Willis Leasing due to non-payment. To avoid additional adverse actions, the PIA plans to return the two A-320 aircraft engines leased from Willis Leasing. In another blow, Alliana, PIA’s insurance broker, issued a termination notice demanding overdue payments, warning that the cessation of insurance would also mean the end of flight operations.

The PIA’s membership with the IATA also hangs in the balance due to non-payment of dues exceeding $2.8 million. The final deadline for payment was June 21, but the payment was only made on June 23. Despite these daunting challenges, the PIA has been assigned the task of expanding its fleet from 27 to 49, a move the government hopes will help pull the airline out of its crisis.