The sources said, CAA has stated that charges amounting to Rs 95.786 billion (approximately) alongside late payment penalty are outstanding against PIA as on December 31, 2018. The PIA is in dire financial straits and meeting its operational needs with GoP support and is currently not in a position to clear its liabilities towards CAA.
Civil Aviation Division, in its summary has sought ECC approval to the freezing of outstanding payable charges to PCAA by PIA as of December 31, 2018 amounting to Rs 95.796 billion (approximately) which have been deferred till such a time as PIA is able to make the payment to PCCA . However, the applicable charges shall be payable by PIACL from January 1, 2019 onwards. Official documents reveal that out of total outstanding charges of Rs 95.796 billion, Rs 71.9704 billion is principal, 3.828 billion is 5 per cent surcharge and Rs 19.998 (kibor + 2 per cent).
According to the Finance Division, the proposal of CCA has been examined. Keeping in view the financial constraints being faced by PIAC, Finance Division has supported the proposal subject to the following conditions: (i) PIA and CCA will sit together and work out an installment plan for payment of PIA''s under reference debt stock of Rs 96 billion (subject to reconciliation) to CAA over a visible timeframe say 5-7 years to be effective from mutually agreed date; and (ii) going forward, PIA will not hold back current collection of CAA charges of all sorts as the continuous non-payment by PIA may put PIA in a liquidity crisis.
The sources said, in line with the revised National Action Plan (NAP) 2019, CAA Aeronautical charges are being reviewed. It has been proposed that all the aeronautical charges on domestic sector be abolished while on international flight operations reduction by 25 per cent has been proposed. The proposal shall be put up for CAA Board''s approval for implementation. The concerned Directorate has been tasked to carry out the subject study for onward submissions to Aviation Division by end March 2019.
The sources further stated that prior to the commencement of summer and winter schedule, bi-annual schedule meeting is organized by Air Transport Directorate to finalise slot timing between representatives of national airlines and Chief Operating Officers/ Airport Managers of International Airports. PIA shall invite deliberations on the slot designation in the scheduled meeting and priority will be given accordingly.
According to the plan, rationalisation of human resource with reference to induction viz-a-viz out-sourcing modules as well as combination of both is being studied/worked out by Human Resource Directorate, which shall be submitted to CAA Executive Committee and CAA Board for approval and implementation.
The Finance Division has already extended an additional guarantee of Rs 15 billion that may be treated as an interim relief to PIA, in addition to a special one-time grant of Rs 485 million for indigenous repair/ upgrade of Inflight Entertainment System on Boeing-777 owned by PIA.
It has also been decided that High Courts will be approached for vacation of stay awarded to PIA litigation cases or early disposal of such cases through a special tribunal.
The tax-regime for airline industry and for air travel in Pakistan is considered very high and is therefore to be re-assessed and rationalised with a view to reducing the rate of taxes being the highest in the region.
