PIA Regains Trust To Get a Loan Without Government Guarantee

Pakistan International Airline (PIA) has been able to get a loan of $300 million without any government sovereign guarantee. PIA revenue growth and operational performance have convinced many international banks to help PIA get this loan.

These international banks include Noor Bank, Mashreq Bank, and Credit Suisse.

Abdullah Hafeez Khan, the PIA spokesperson said, ” Our credit rating has improved and purely based on our revenue improvements, we are going to get this loan.”

PIA needed this loan for buying new airplanes, other spare parts, maintain engines, which can only be bought from international markets where the payment medium is in dollars.

Previously, banks asked PIA for a sovereign guarantee or pledge their assets against the loan. Taking the government guarantee took months where the request will be forwarded to a number of departments including the finance ministry and State Bank of Pakistan.

The loan lend has been given on the basis of product and service improvements, and cost-cutting. The spokesperson made the statement regarding the loan money, “Because of our performance, and numbers of sales, revenue and profits, which the banks have seen, the money lenders have agreed to extend the loans without government sovereign guarantee.”

The airline needs to work on a number of things. The fleet of airplanes needs new addition. Planes need new engines. This investment is an investment in the country actually. PIA CEO has informed in the annual general meeting  (AGM) that the organization has achieved 84% and has controlled the dramatically increasing losses. The Financial results of 2019 will be compiled soon.

Also Read: PIA Operating Cost Reduced By 75% In 6 Months

The revenue of PIA has exceeded since March 2019 as it has recovered from losses at operational levels. However, it will take at least 4 years to report a profit.

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