Pakistan International Airlines has resorted to widespread flight cancellation, leaving thousands of passengers in distress as the national flag carrier’s financial situation went from bad to worse.

Since Sunday, the airline has cancelled around 77 international and domestic flights due to the non-availability of fuel to manage its flight schedule.

Presently operating with just 16 aircraft, the partially state-owned airline, which the caretaker government wants to privatise, has got into a muddle with the Pakistan State Oil (PSO) refinery which supplies fuel to the airlines over non-payment of dues and its credit line.

A PSO official said the PIA owed billions of rupees in dues.

"This is the second time in seven days we have had to suspend supplying fuel to PIA because of the mounting unpaid dues. They are making partial payments to meet their daily fuel requirements but the dues remain unpaid as yet," he said.

The airline, which was once considered the pride of Pakistan and was the first international airline to be given access to fly to Beijing, is said to be suffering millions in losses on a daily basis.

A PIA spokesperson confirmed that 77 flights had been cancelled since Sunday after the PSO cut the airline’s fuel supply.

"Today the situation has improved as payments have been made and matters are being sorted out with PSO," he said.

He however could not confirm how many flights had flown on schedule on Monday but hoped the schedule would be normalised by late night.

"The airline couldn’t pay on Sunday due to banks being closed," he explained.

The national carrier had 81 flights — 52 international and 29 on domestic routes — scheduled for take-off on Sunday. However, all but four international flights were cancelled, according to him.

The PIA spokesperson said flights had been partially restored on Monday.

Last month, a meeting of the Privatisation Commission agreed on a clear timeline for the privatisation of PIA.

The flight cancellations caused problems for thousands of travellers on international and domestic routes with many of them telling television channels they had never seen the situation so bad in the airline.

Aviation experts believe the airline’s poor state of affairs was mainly due to overstaffing and political appointments in PIA over the years and the decision of the government to have an open skies policy a decade back.

The airline has been so badly managed in the last few years that the PIA has even had its leased aircraft seized in foreign countries because of non-payment of dues.

In July, an aircraft was stopped in Kuala Lumpur by a leasing company as it wanted its dues cleared first.

To make matters worse, a former federal minister for aviation Ghulam Sarwar Khan caused the airlines to close its credibility in Europe and other countries when he claimed in the National Assembly that more than 30 per cent of the civilian pilots in the country held “fake” licences.

He claimed that 262 out of the 860 active pilots "did not take the exam themselves" and had paid someone else to appear on their behalf.