AsianOil: Pakistan energy shortage prompts cancellation of PIA flights

Pakistan’s economic and energy crises have reached a point where the national carrier, Pakistan International Airlines (PIA), has been forced to cancel 322 flights over a 10-day period, including 134 flights on international routes, the domestic media reported this week.

This is just the latest development in a seeming downward economic spiral that has led to Pakistan being unable to secure energy supplies leading to regular shortages and power outages.

According to reports, Pakistan State Oil (PSO) has refused to deliver fuel to PIA because of unpaid bills amounting to billions of rupees. The government has refused a request by PIA to provide PKR23bn ($83mn) for operational costs and intends to privatise PIA and other state-owned companies that are failing to make a profit at the urging of the International Monetary Fund.

The airline’s history goes back to 1955 when the government at the time nationalised a loss-making commercial carrier. PIA is said to have been making a loss for a number of years and is now in debt for up to PKR743bn ($2.5bn), which is five times more than the value of its assets.

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