ECC Advocates Beleaguered PIA’s Sell-off

[Abbas Ali]

Economic Coordination Committee (ECC) of the Cabinet directs that emphasis should be given to PIA’s privatization instead of restructuring as the airline is on active list of privatization.

Details: https://www.brecorder.com/news/40263143 ... s-sell-off

[Amaad Lone]

Easiest way forward.

An airline like Air Blue step forward and takes over the routes and aircraft of PIA and pays the PIA the value of the aircraft it buys.

Plus they choose the employees they want.

PIA is finished and is merged with Air Blue

The remaining employees and debt are taken over by the SBP which sells its assets and pays off loans.

Nothing is disturbed and operations continue the way they are under the new airline banner.

This is an ideal scenario.

[Hassan777]

Air Blue can’t buy spares for its Aircraft sitting at Karachi, where would they get the money to buy PIA fleet and slots?

[b78709]

Air Blue can’t buy spares for its Aircraft sitting at Karachi, where would they get the money to buy PIA fleet and slots?

It can be an all share transaction. No need to pay in cash.

[Amaad Lone]

Today the desperate situation is there because of number of governments ignoring key PIA problem, DEBT.

If you see the major losses from last 5 years, the biggest contributor is exchange rate losses and interest payments.

Exchange rate loss is not a cash flow loss its more an accounting loss which you have to book every three months as your dollar based liabilities rise.

If the government had sold the two hotels two or three years ago it would have made PIA debt free, saving 100 billion rupees in losses for the past three years.

While sitting on the prime properties it ignored the core issue of PIA and governments kept handing out bailouts which were technically loans from banks and PIA kept on piling up debt and more debt.

Even today if the two hotels are sold and 350-400 billion rupees are pumped into the airline, and majority loans paid off and liabilities of PSO and FBR and CAA are partially paid it would give the airline a new lease of life.

The airline can have the breathing space, and hopefully once the routes to UK US and Europe restart the operational profit will filter in and airline go into black.

But the poor planning for previous governments has let PIA to bleed to death and now they want to throw it away.

God bless Pakistan.