Financial woes at Pakistan International Airlines causing headaches for Canadian travellers

When he learned that Pakistan International Airlines is facing a cash crunch, Edmontonian Shakil Meenai's first instinct was to check the status of his domestic flight from Lahore to Karachi.

Meenai, 60, has plans to travel to Pakistan, his home country, in mid-October, a trip he makes once a year.

He decided to book with Pakistan's national carrier for his short trip between the two Pakistani cities.

Without him being notified, Meenai's flight from Lahore to Karachi was cancelled and rebooked to a flight seven hours later.

"This was done without my consent and without any sort of intimation to me," Meenai told CBC in an interview. "Other airlines, if the flight schedule changes by 10 or 15 minutes, even in those cases they give you a heads-up."

Last month, Pakistan International Airlines (PIA) began scaling back its operations as unpaid bills racked up and lessors moved to block the carrier from flying their aircraft unless it can catch up on overdue payments.

Shakil Meenai says he would never consider taking an international flight with Pakistan International Airlines after experiencing unexpected cancellations with domestic PIA flights. (Submitted by Shakil Meenai)

The Pakistani government rejected the airline's request for an emergency bailout of about $100 million. Instead, it directed the state-owned carrier to secure commercial bank loans, according to ch-aviation, a Swiss airline intelligence agency.

This time of year is peak travel season for Canadians wanting to visit family and friends in Pakistan. Weather is generally favourable and it's also prime wedding season.

But travellers say they're flocking to other airlines because they no longer see PIA as a reliable option.

PIA does not fly out of Edmonton International Airport. The airline does offer direct flights to several Pakistani cities from Toronto's Pearson International.

Meenai said cancellations, delays, high ticket prices and poor customer service are making people turn to other airlines.

"The only people who fly internationally with PIA, especially from Canada, are those who are basically either not comfortable in transiting through other countries or our seniors," Meenai said.

According to Statistics Canada's 2021 census, about 40,000 people in Alberta identify as Pakistani.

In August, the Pakistani government announced plans to privatize the airline after it accumulated hundreds of billions of rupees in losses.

Hamed Ghanbari, a finance professor at the University of Lethbridge, said PIA has five times more liabilities than assets.

A government bailout might solve the problems but that is difficult when the country is dealing with a sovereign debt crisis and political uncertainty, Ghanbari said.

"When I look at the root cause of these scenarios and the big picture of their financial situation, I don't see any prospect in the near future that this will be resolved," he said.

Ghanbari said privatization might be another way to deal with the airline's financial woes.

"Maybe that will be the solution so that they always find a balance between the budget so that they don't end up in this situation," he said.

PIA's predicament is different from that of a troubled for-profit North American or European carrier, he said.

"The moment they realize that this is not profitable, they try to guide resources in a way that either they will survive, or they fight for protection.

"Given current exchange rates, and the fact that [PIA] mostly runs on demand that cannot be served, it makes for a difficult situation."

'A sour taste'

CBC News made two requests for comment from PIA. They did not respond in time for publication.

Salman Naseer, president of the Pakistan Canada Association of Edmonton, said at one point decades ago, PIA provided quality service. But over the years, he's heard more horror stories from people in the community who have opted to fly with the airline.

"People have all the right as a consumer to compare apples to apples," Naseer said. "If you're paying that much to an airline, and one airline is giving them all those services compared to the other airline, it'll definitely bring a sour taste."

Salman Naseer, president of the Pakistan Canada Association of Edmonton, said he's heard increasing complaints about PIA's service from community members. (Submitted by Salman Naseer)

It's not easy for any airline to decide to cut back services, said Karl Moore, an associate professor of strategy and management at McGill University.

Things like reputation are at play, he said.

"Within Pakistan, [PIA] is the dominant player. So everyone in the country is aware of what's going on with them," Moore said.

"It's really being forced to by challenging circumstances is why you do things like that. You don't do it lightly for sure."