PIA defaults on Rs1.5 bn US loan taken for Boeing 777s

[Edevelop]

ISLAMABAD: As the PPP prime minister quit office on Sunday, he left behind a massively mismanaged corruption-hit and loss-making national flag carrier, PIA, which has now defaulted on a US Bank loan taken to buy the 777 aircraft.

The outgoing government of the PPP failed to release the required US$ 14 million (about Rs1.5b) to the airlines despite the government’s sovereign guarantee.PIA is badly in need of getting the required money from the Finance Ministry immediately to avoid the possible disruption of its flights to the United States.

All the burden is now on the newly appointed caretaker Prime Minister Justice (retd) Mir Hazar Khan Khoso to immediately release the money to save the country and its national carrier from worldwide embarrassment.

A spokesman of PIA when contacted admitted that there is a delay in the payment of loan but denied that there is any disruption in PIA operations to the United States. “There is no warning even issued to us,” the spokesman Mashood Tajwar said.

He explained that the secretary finance was not well, which resulted in the delay in the release of the required money. He said that the payment would be released on Monday for early payment of the loan. Tajwar said that such delays of payment are a routine matter.

PIA sources, however, said that a strong warning was issued to the PIA management for its default of US$14 million. The former government of Raja Pervaiz Ashraf was warned by the PIA management of the lingering threat of default but the Finance Ministry as well as the government did not give such warnings any serious thought and let the airlines default.

“This default is the first ever in the airlines’ history,” an airlines source said, adding that the outgoing government is responsible for this situation because despite the timely warning nothing moved in Islamabad.

Contrary to expectations of the PIA spokesman, the source was unsure whether the Finance Ministry would release the required money on Monday or not. “We even have doubts about the authority and firmness of the caretaker prime minister, who should take notice of this situation immediately,” another source said. It is said that even after the release of the money on Monday, the payment would reach its destination on Wednesday.

The PIA sources said that besides ruining the national airlines like several other state institutions by the outgoing corrupt regime of the PPP through its politicised appointments and massive corruption, the government had pushed the airlines to a default situation. “It’s a great embarrassment for the airlines,” the source said, demanding that immediate remedial measures be taken to save the airlines from complete collapse.

PIA defaults on Rs1.5 bn US loan taken for Boeing 777s - thenews.com.pk

 

[W.11]

this is a fake news, PIA paid the money 3-4 days late but PIA didnt default

 

[Thəorətic Muslim]

Default payment is when the debtor hasnt met the agreed upon date on repayment of installment.

So PIA did default 3-4 days.

This has only hurt PIA, there credit rating is lower, any loans they take will have higher interest rates.

 

[Argus Panoptes]

this is a fake news, PIA paid the money 3-4 days late but PIA didnt default

Default payment is when the debtor hasnt met the agreed upon date on repayment of installment.

So PIA did default 3-4 days.

This has only hurt PIA, there credit rating is lower, any loans they take will have higher interest rates.

Late payment is not default. Default is usually declared if a payment is more than 30, 60 or 90 days late, depending on the contract.

 

[RazorMC]

What is that PIA source talking about embarrassment ??

The whole airline is in a mess, isn't that embarrassment enough?