Report: Pakistan International Airlines Aircraft Seized in Malaysia for Unpaid Dues

This is the second time the PIA aircraft has been seized in Malaysia over a dues issue. The same aircraft was seized by the Kuala Lumpur airport authorities in 2021 on the same issue.

Pakistan is currently experiencing a severe financial crisis and recently faced an embarrassing situation when its national carrier's plane was seized in Malaysia due to non-payment. The aircraft in question is a Boeing 777 owned by Pakistan International Airlines (PIA), which had been leased from Malaysia. The plane, registered as BMH, was halted at Kuala Lumpur International Airport for the second time due to outstanding dues totaling $4 million. Following a court order, the Malaysian company seized the PIA plane after the dues remained unpaid.

This is not the first time that the PIA aircraft has been seized in Malaysia over payment issues. The same aircraft was seized by authorities at Kuala Lumpur airport in 2021 for the same reason but was later released with the assurance of payment. On January 27, the plane, along with 173 passengers and crew, was returned to Pakistan.

Pakistan is currently facing a serious economic crisis, with a significant drop in forex reserves affecting services abroad and imports. In response, Prime Minister Shehbaz Sharif has instructed the foreign ministry to reduce the number of missions abroad, downsize offices and staff, and implement other measures to reduce the nation's expenses by 15 percent due to the country's debt burden.

Recent reports indicate that a public sector hospital in the Upper Kohistan district has suspended its services due to a lack of funds. The shortage of funding has also impacted 19 outsourced health centers, which are now limited in their services. The Dasu DHQ hospital has even suspended all services due to financial constraints.

In the midst of these challenges, the International Monetary Fund (IMF) is actively engaged with Pakistan. Nathan Porter, the IMF's mission chief for Pakistan, has stated that discussions are underway to hold a board meeting before the financing program expires at the end of June. The board meeting requires a prior staff-level agreement, which would unlock $1.1 billion in financing as part of a $6.5 billion IMF package. The delay in reaching a staff-level agreement has led to the postponement of the pending tranche of $1.1 billion since November.

Porter emphasized that the focus of the engagement with Pakistan will be on restoring proper foreign exchange market functioning, ensuring the passage of a budget for FY24 aligned with program goals, and securing adequate financing.

Despite these challenges, Pakistan's Finance Minister, Ishaq Dar, has asserted that the country is not on the brink of a financial crisis and firmly stated that Pakistan will not default.