PIA Suffers Rs8.56 Billion Loss Due to Failure to Sell Spare Parts of Grounded Aircraft

Islamabad: Pakistan International Airlines (PIA) has incurred a massive loss of Rs8.56 billion due to its failure to timely sell spare parts of grounded aircraft, officials informed the Public Accounts Committee (PAC) on Wednesday.

The matter came under discussion during a PAC meeting in Islamabad chaired by Syed Naveed Qamar, where the audit report for 2023–24 and several key financial and administrative issues related to PIA were reviewed. The committee was briefed on losses caused by unsold spare parts of grounded aircraft, the airline’s financial condition, privatization-related matters, and various audit objections.

PIA officials told the committee that delays in auctioning spare parts resulted in losses amounting to Rs8.56 billion. So far, spare parts worth Rs3.8 billion have been auctioned, while the remaining parts have been transferred to PIA’s buyer. Officials further disclosed that six PIA aircraft are currently not airworthy, and retired aircraft have already been handed over to the buyer. The sold assets included grounded aircraft and their spare parts.

The meeting also discussed two PIA properties from which Rs2.61 billion was to be recovered from the Sindh government. Officials informed the committee that both properties have now been transferred to a holding company, after which the PAC disposed of the related audit objection.

The committee also reviewed the audit report of the Ministry of Defence, which highlighted irregularities amounting to Rs120 million in procurement by the Airports Security Force (ASF). The Defence Secretary accused audit officials of raising unwarranted objections, prompting the PAC chairman to remark that such allegations were inappropriate at a high-level forum. The Defence Secretary later acknowledged that pay orders should not have been deposited into the ASF fund and assured the committee that this would not happen in the future.

Audit officials pointed out that the ASF fund was not being audited. In response, the Defence Secretary clarified that no public exchequer funds are included in the ASF Foundation Fund. The PAC directed the Ministry of Defence to seek a legal opinion from the Ministry of Law on the matter.

The meeting also examined audit objections amounting to Rs167 billion against PIA. Audit officials revealed that the airline failed to pay Rs131 billion in taxes and duties. According to the Defence Secretary, Rs115 billion of this amount has been shifted to the holding company as part of the privatization process, along with PIA’s total liabilities of Rs688 billion.

PAC Chairman Syed Naveed Qamar questioned how the holding company would manage such huge liabilities, to which the Defence Secretary replied that the Ministry of Finance has not yet made a final decision.

Committee member Shahida Begum criticized PIA’s financial management, terming it extremely poor. PIA officials informed the committee that several officers have already been dismissed over allegations of financial mismanagement.

Audit officials further disclosed that grounding eight aircraft caused losses of Rs21 billion to PIA, while audit reports showed that aircraft repairs took between 44 and 652 days. PAC members questioned the prolonged repair timelines. PIA officials attributed the delays to the COVID-19 period, adding that despite extended repair durations, no additional financial loss was incurred due to delayed maintenance.