Auditor General Raises Concerns Over PIA’s Maintenance Delays Costing USD 134 Million

A recent report by the Auditor General of Pakistan has uncovered significant financial implications for PIA – Pakistan International Airlines (PK, Islamabad International) due to delays in routine aircraft maintenance. According to the report submitted to the country’s parliament, these delays cost the national carrier over PKR 38 billion rupees (USD 134 million) in 2021.

The audit highlighted substantial challenges within PIA’s engineering and maintenance units, citing specific instances of prolonged periods taken for routine maintenance, repairs, and inspections. Notable examples include:

• 520 days for maintenance of a B777-300ER (AP-BID, msn 33780);
• 250 days for maintenance of a B777-200ER (AP-BMG, msn 32716);
• 905 days for maintenance of an ATR aircraft;
• 905 days for maintenance of an A320-200; and
• 540 days for maintenance of a second A320-200.

These delays resulted in aircraft being out of service for a total of 2,991 days in 2021, incurring costs of PKR 12.8 million (USD 45,400) per day for PIA.

In response, PIA management attributed the delays to increased cannibalization from aircraft under heavy maintenance. The Auditor General’s findings underscore challenges within the airline’s maintenance operations.

Meanwhile, PIA is in the midst of government efforts to partially privatize the struggling carrier. Set to complete by February 2024, the partial privatization involves selling a 40% stake and management rights to a foreign entity in exchange for fresh funding. To facilitate this process, PIA is reportedly prohibited from entering into any long-term contracts, including aircraft leasing.

The report also shed light on significant assets held by PIA in foreign jurisdictions, including hotels, residential properties, and commercial real estate, valued at PKR 176 billion (USD 624 million). However, the airline faces considerable debts amounting to PKR 742 billion (USD 2.63 billion) and is projected to incur a loss of PKR 112 billion (USD 397 million) in the current calendar year.