The non-payment of wages is the latest in a long line of controversies for the Pakistani flag carrier.
Pakistan International Airlines (PIA) has come under fire after it allegedly failed to pay some of its employees’ salaries. As a result, a number of the airline’s pilots are reportedly planning not to operate any flights until they have been paid.
The Pakistani flag carrier has been struggling to pay salaries for months due to a shortage of cash, and according to the pilots, the government has not stepped in to help either. This has left employees out of pocket and could lead to significant operational disruption if the walkout goes ahead.
PIA’s mounting debts
Reports from the local news outlet ARY state that PIA has tax debts amounting to over Rs400 billion ($1.4 billion). The carrier also recently asked for a government bailout to the tune of Rs45 billion ($157 million) to help.
PIA is currently banned from flying to the European Union, the UK, and the US – three huge markets for the airline, and the loss of revenue from being unable to operate these services is hitting its finances hard. In a bid to keep hold of its coveted slots at London Heathrow (LHR) while not in use, PIA has temporarily offered them to Turkish Airlines and Kuwait Airways.
For the pilots involved, not receiving their salary could not have come at a worse time, faced with mounting inflation and a country ravaged by a shortage of foreign currency reserves.
An increasingly challenging operating environment
Reports from earlier this year state that up to $290 million remains stuck in Pakistan. This has led the International Air Transport Association (IATA) to warn that the current situation may make for a very challenging operating environment for foreign airlines.
IATA’s head of Asia-Pacific, Philip Goh, told the Financial Times,
“Airlines are facing long delays before they are able to repatriate their funds. Some airlines still have funds stuck in Pakistan from sales in 2022. If conditions persist that make the economics of operation to a country unsustainable, one would expect airlines to put their valued aircraft assets to better use elsewhere.”
Later this month, Virgin Atlantic will withdraw completely from Pakistan as its services from both London Heathrow (LHR) and Manchester (MAN) come to an end. The airline cited low yields as the reason for the withdrawal, with the aircraft able to make more money on other routes, such as Tel Aviv (TLV) and Shanghai (PVG)
These are tricky terms for Pakistan International Airlines, as it faces significant economic challenges. Failure to pay staff wages can only lead to discontent and potential operational disruption – which will certainly not help the struggling carrier recoup some of its losses.
