Pakistan International Airlines (PIA) has grounded 150 pilots over claims they may not hold a valid licence.
Addressing Pakistan's National Assembly, Ghulam Sarwar Khan said 262 pilots in the country "did not take the exam themselves" and had paid someone else to sit it on their behalf.
It comes as an initial report into a PIA crash that killed 97 people last month found the cause to be human error by the pilot and air traffic control.
Pakistan has a chequered aviation safety record with a number of crashes.
Pakistan has 860 active pilots serving its domestic airlines -- including the country's Pakistan International Airlines (PIA) flagship.
Following the 2018 crash, it was discovered that the test date on the pilot's licence was a public holiday, suggesting that testing could not have taken place on that day.
PIA has grounded all its pilots who hold fake licenses, effective immediately.
"PIA acknowledges that fake licenses is not just a PIA issue but spread across the entire Pakistani airline industry," spokesperson Abdullah Khan said, adding that some of the fake pilots also fly for foreign carriers.
Khan did not clarify if the two pilots on flight PK 8303 held fake licenses.
According to the report, the pilots were chatting about the coronavirus and repeatedly ignored warnings from air traffic controllers before the plane went down in a residential area near the airport.
"The pilots were discussing corona throughout the flight. They were not focused. They talked about the coronavirus and how their families were affected," Khan said, adding that the pilots were "overconfident."
Mr Khan said the pilot initially failed to deploy the landing gear correctly, which led to the aircraft scraping the runway before then taking off again. As the plane was about to make a second landing, air traffic controllers failed to tell the pilot that the plane's engines had been left badly damaged.
Mr Khan said a full report on the crash would be released in a year's time and will include details from a recording taken during the descent.
Khan also promised that PIA, a state-owned airline would be restructured and vowed that action would be taken against rogue pilots.
Since 1965, PIA has suffered 10 major crashes and several minor incidents. Inquiries have been held but they don't seem to have led to any improvements.
Many say the airline, which once played a major role in the launch of one the top Middle Eastern airlines, Emirates, has subsequently gone down the same path to institutional decay as the rest of the country.
In recent years, there have been frequent allegations of drug trafficking and smuggling involving PIA staffers, but in most cases there haven't been visible reprisals.