ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet okayed the release of $16.46 million to the cash-starved Pakistan International Airlines to induct 15 aircraft on dry lease.
The airline plans to spend $52m on the induction. The meeting, chaired by Finance Minister Ishaq Dar, decided that the first tranche ($16.46m) would be released to PIA this month. This amount will be injected as equity. Under a ‘dry lease’, the aircraft are acquired without insurance, crew, ground staff, support equipment and maintenance facilities.
The ECC approved a proposal submitted by the Aviation Division, asking the PIA to complete all formalities required under the rules of procurement. Analysts interpreted the ECC’s nod to PIA’s request as the first step towards an attempt to revive the airline. The consensus among experts is that the national carrier, once the country’s pride, needs a massive surgical operation to make it competitive once again.
The airline epitomises inefficiency and mismanagement these days, according to them, and is crying out for retrenchment. Nothing will work except a ruthless purge of a top-heavy organisation to rid it of dead wood, the experts contend.
The ECC constituted a committee consisting of the finance secretary, SECP chairman and the petroleum secretary to analyse PIA’s financial statements and projections before the second tranche is released. PIA is supposed to get back to the committee after Dec 20, after the amount released has been fully exhausted, for fresh instalments that will be paid on monthly basis.
Mr Dar directed PIA authorities to inform the forum at least two weeks before the actual payments were due so that the funds could be released in time. The finance minister attended two other meetings, where he reviewed the liquefied natural gas (LNG) import situation and the import of solar panels.