ISLAMABAD :  Pakistan Civil Aviation Authority (PCAA) has approached the government for renewal of regular and charter licences of Pakistan International Airlines (PIA) despite the fact that the airline  flouted ECC direction about clearance of current applicable charges, well informed sources told Business Recorder.

Pakistan Civil Aviation Authority (PCAA), sources said, has submitted a case for renewal of regular pubic transport, aerial work licence class-II( domestic/ international) and charter licence class-II( domestic/ international) of M/s Pakistan International Airlines Corporation Limited (PIACL) with effect from April 1, 2020 for a further period of two years. PIACL was granted renewal of its licences for a period of 01 year from April 1, 2019 to March 31, 2020. Subsequently, DG CAA granted extension in the validity of licences to PIACL for 120 days which is valid upto July 29, 2020.

Flight standards, airworthiness and consumer protection branch/ directorates of PCAA have no objection to the renewal of PIACL’s licences. However, Finance Directorate of PCAA has maintained that the airline has not complied with the decision of the Economic Coordination Committee (ECC) of the Cabinet which required it to start clearing current applicable charges from January 1, 2019. Current PCAA dues accumulated to the tune of Rs 17.056 billion as on December 31, 2019. Further, economic oversight branch of PCAA has conveyed that the paid-up capital of PIACL is on the negative and the carrier has also failed to submit the required security deposit for the licences.

The ECC in its decision had approved freezing of outstanding dues of M/s PIACL payable to PCAA alongside late payment penalty amounting to Rs 95.796 billion as of December 31, 2018 with the direction that the applicable charges shall be payable by PIACL from January 1, 2019 onward.

Aviation Division is of the view that loss-free paid-up capital and security deposit are necessary preconditions under Article 4.3.2 of National Aviation Policy (NAP) 2019 for renewal of licences. Article 4.3.3 of NAP-2019 stipulates that the operations of a carrier shall be suspended if it defaults on outstanding dues for a period equivalent to 2 fortnightly bills, and recovery shall be made from attachment and / or sale of its tangible and intangible assets. To ensure continuity in PIACL’s operations and for renewal of its licences, it is necessary to relax the provisions of NAP-2019. While the power to renew existing licences has been delegated to Minister for Aviation, the power to relax the provisions of NAP-2019 rests with the federal cabinet as per NAP-2019, the sources added.

 Aviation Division has requested federal cabinet to relax the provisions of NAP- 2019 for renewal of PIACL’s regular  licence of pubic transport, aerial work licence class-II( domestic/ international) and charter licence class-II( domestic/ international) .—MUSHTAQ GHUMMAN