Pakistan International Airlines (PIA) has been able to progressively resume flight operations thanks to a new Rs500 million credit from Pakistan State Oil (PSO).
A PIA spokesperson stated that the financial disagreement between the two aforementioned businesses has been settled, which would allow for an increase in fuel supply to the airline firm soon.
PIA's flight services have been severely affected over the past two weeks, which has led to the cancellation of almost 375 domestic and international flights. The state oil company's decision to stop providing fuel to the state-owned airline due to unpaid debt caused this inconvenience.
Fuel was supplied by the national oil firm after funds were received in advance, but PIA has fallen behind on its payments to PSO. Several scheduled flights were canceled by the national airline in the previous two weeks as it modified its flying operations based on fuel availability.
However, despite the carrier's decreased payments for the supplies, PSO stated that it has not stopped providing fuel to PIA. "PIA was given a Rs15 billion credit limit, which was already exhausted," stated the PSO.
According to the state-owned oil corporation, trade receivables of Rs765 billion are causing it to face financial challenges at the moment. It has been in communication with PIA to find a workable way to address this issue. PSO is working to deliver fuel to the national airline, PIA, despite the latter's overdue balance of Rs26.8 billion as of October 26, according to the statement.
Senior representatives from the two state-owned companies convened on October 16 to decide on the next steps.
According to the agreement, PSO was supposed to provide fuel to PIA between October 16 and October 26, subject to payment based on flight priority. Following another round of talks on October 27, PSO said that it has extended the loan facility by Rs 500 million to further help the national carrier.