- National flag-carrier losing its flight following a default amounting to Rs 12b as PSO warns of fuel supplies’ disconnection to company’s 35 planes if partial payment is not made
At least 35 aircraft of the Pakistan International Airlines (PIA) will be grounded if the national flag-carrier fails to pay at least Rs 2 billion to the Pakistan State Oil (PSO) by 5pm today (Tuesday).
The PSO had set November 17 as the deadline for PIA to pay its dues amounting to Rs 12 billion on account of fuel supplies.
According to a PSO spokesman, the oil giant’s outstanding dues had been piling up for the last couple of years. “PIA’s receivables towards PSO for the supply of jet fuel have risen to more than Rs 12.1 billion over the last 1.5 to 2 years,” said the spokesman.
The PIA had committed to paying dues after “PSO warned the airlines of halting its fuel supplies to its ATR flights” –short haul domestic flights/turbo propeller planes– from Monday, the spokesman told Pakistan Today.
Following PSO’s warning, the PIA managing director had committed paying Rs 2 billion out of the outstanding amount of Rs 12 billion to PSO by Tuesday (today), he added. Based on this assurance, the PSO had decided to continue fuelling PIA flights.
Asked about the future course of action, the spokesman said, “PSO will review the payment situation on Tuesday (today) at 5pm and then take steps accordingly. We are holding suspension based on their commitment to pay. If PSO receives the payment, it will go towards making payments to the suppliers.”
A stoppage of fuel supplies, the sources said, would first impact PIA’s domestic flights and then the international ones.
Moreover, the PSO spokesman said that despite PIA’s perpetual payment default, the PSO had continued uninterrupted fuel supplies to it. In this regard, a meeting, attended by managing directors of the PIA and PSO, was also held at the Ministry of Petroleum and Natural Resources on November 6.
“During the meeting it was explicitly communicated that PSO would not be able to continue uninterrupted fuel supplies in case of non-payment by PIA,” the spokesman said. However, he claimed that no positive steps were taken by the PIA management to clear the outstanding balance.
On the other side, PIA spokesman Rafique Zardari confirmed that PIA’s top management had committed a partial payment. However, he denied reports that the PSO had cut fuel supplies.
Zardari said that the national flag-carrier’s fleet comprised 35 planes and no fuel supplies’ disconnection had been made to them. He added that the PSO had asked PIA to make the payment that was pledged.