Worst Airline In The World Can’t Pay Fuel Bills, Limits Flying

by Gary Leff

Pakistan is desperate to privatize its loss-making national airline, and floated rumors that Qatar would take over the carrier along with the Lahore, Karachi, and Islamabad airports.

Past privatization efforts have led to violent protests and clashes with police but things are now so bad that the government’s oil company won’t provide fuel to the government’s airline unless they pay up front and they have limited funds to pay with.

  • PIA doesn’t have the funds for fuel, and the government is cash-strapped.
  • Dozens of flights are being cancelled, because the state oil company will only provide fuel when bills have been prepaid.
  • So the airline is prioritizing a handful of flights that can be covered by about $360,000 per day.
  • This allows operation of around 26 roundtrips total.

Athar Awan, a deputy spokesman for PIA, said 48 international and domestic flights were cancelled on Tuesday and Wednesday “due to non-availability of fuel”.

“The reason for the disruption in fuel supply is non-payment of dues because PIA is facing a financial crisis and cannot pay the dues to Pakistan State Oil on time,” a PIA official speaking on condition of anonymity told AFP.

Decades of mismanagement and instability have hobbled Pakistan’s economy, and this year Islamabad was forced into yet another bailout from the International Monetary Fund (IMF) to avert default.

The airline has been working to free up cash to pay for fuel. However the airline’s liabilities are estimated at five times its assets. It’s unclear how long it can fly on the basis of prepaid fuel even making additional funds available.

Pakistan International Airlines is the worst airline in the world. Best known for sacrificing a goat for safety and flying with more passengers than seats (and making customers stand for 1700 miles), the airline’s former CEO was actually detained as a result of his efforts to provide good seats and service by wet leasing aircraft from SriLankan.


Boeing 777 on Approach to New York JFK in 2014, Copyright zhukovsky / 123RF Stock Photo

The airline is so bad that even operating on time creates problems: customers build failure into their expectations and don’t actually show up for flights when they’re scheduled to depart. Shortly before the pandemic PIA had one of its planes repossessed, while passengers were still on board.

Nonetheless, the Pakistan market is a large one and one of the drivers behind the new United Airlines partnership with Emirates, and a significant market for the American Airlines partnership with Qatar Airways funneling traffic through Doha. A properly-run PIA could be profitable, but it’s been run as a political fiefdom and cookie jar for so long it’s unclear whether such a thing is possible.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Basket case country because of its unhealthy obsession with India and having a military that runs the show for itself — more than even it may realize — while feeding off military assistance packages and handouts from any country desperate or foolish enough to think that Pakistan can be counted upon being a decent partner.

    Pakistani military’s power within Pakistan is a big part of the country’s problems. PIA is one of the casualties of what truly is the deep state therein, a deep state that sells out to China like it used to sell out to the Saudis and Uncle Sam but fails to uplift its people in socio-economic terms longer term.due to foreign bailout reliance.

  2. Although flights to the EU and US are banned, you can still fly nonstop from Toronto to Lahore and Karachi on PIA. I have heard that the EU will soon revisit this decision, which was mostly based on pilot accreditation issues that have been sorted out after an accident caused by a pilots with fake licenses who forgot to lower their landing gear or conduct proper landing checklists and hit the deck on landing.

    My own sense is that privatization has a real chance and the Pakistani railways have already been materially privatized to great success and private carriers have captured large market share from PIA.

  3. Government-run anything necessarily, but its nature, will not work well because decisions are not made on quality and efficiency, but in who you know or who pays you off.

  4. I always wondered about the PIA flight from Canada via Pakistan to DXB, if that would be worth it. And PIA sells elite status cheap. So PIA remains on my radar as a low cost opportunity (bottom feeder shark that I am.) Internet reviews oscillate between Pakistani patriotic boosters and worse-service-ever Westerners.

  6. @BigTee PIA sells what used to be SQ Spacebeds as “Executive Economy” from YYZ-KHI for about US$2000. Not a bad deal if you’re already in Toronto, but if you’re not you might as well fly QR in Premium Economy and have a better connection and a bit less comfort for less money.

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