Govt denies financing new PIA aircraft

Finance adviser to Prime Minister Khurram Schehzad has clarified that the government is not purchasing new aircraft for Pakistan International Airlines (PIA) and has not approved any sovereign guarantee for loans to finance the airline’s fleet.

Schehzad made the clarification on Sunday after claims circulated on social media that the government was arranging sovereign-linked financing for PIA’s proposed aircraft purchases.

He said PIA was privatised through an auction last year and the government was not taking responsibility for purchasing aircraft for the airline. He also rejected suggestions that taxpayers would be exposed to commercial borrowing linked to the airline.

The issue emerged after a meeting between Finance Minister Muhammad Aurangzeb and US Export-Import Bank President John Jovanovich during the United Nations General Assembly session in New York. According to the Finance Ministry, the meeting included discussions on the Reko Diq mining project and possible financing options for an aircraft purchase by PIA.

During the meeting, Aurangzeb highlighted PIA’s interest in Boeing 787 Dreamliner aircraft and requested support for a possible financing package covering aircraft and engines.

Schehzad explained that the US Export-Import Bank primarily supports American exports and employment. Since Boeing aircraft are manufactured in the United States, the bank can provide financing support to foreign buyers under established arrangements.

He said such financing can be secured against the aircraft itself, while the credit assessment may consider the airline, lessee or another guarantor where applicable. Therefore, a sovereign guarantee from the Pakistani government is not automatically required.

The adviser said the government’s role was to facilitate Pakistani businesses by connecting them with international financiers, technology providers and suppliers. He added that the finance minister’s discussions with US Exim were not limited to PIA.

The talks also covered possible financing for aviation, refinery upgrades and the Reko Diq project as part of broader Pakistan-US economic cooperation.

Schehzad said the government was pursuing greater private-sector participation while reducing its direct involvement in commercial activities. He stressed that supporting private businesses did not mean the state would take over their commercial responsibilities.

He further said claims about a public loan, hidden subsidy or government backstop for PIA should not be treated as confirmed facts. According to him, the discussions concerned potential US Exim financing support and did not amount to an announcement of government borrowing or a sovereign guarantee for PIA.