PIA acquires ownership of planes to save rentals

KARACHI — Cash-strapped and severely handicapped by shortage of airworthy planes, Pakistan’s national flag carrier Pakistan International Airlines (PIA) had signed agreements with Airbus and Boeing for transfer of ownership of six A310 aircraft which were acquired by the airline on lease in 2004 and five new 777s.

By (Rehan Siddiqui)

Published: Sat 18 Feb 2012, 10:18 PM

Last updated: Tue 7 Apr 2015, 11:17 AM

“Transfer of ownership of the six aircraft to PIA is another step forward in implementing the Business Plan under vision 2020 and will help PIA save $2 million monthly rentals and to help greatly in reducing its losses as well as putting the airline on road to profitability”, PIA Managing Director, Nadeem Khan Yousufzai told newsmen after a signing ceremony in Karachi on Thursday.

The agreement was signed by Yousufzai and Director Asset Management Airbus, Patrice De Puymorin and attended by PIA’s Deputy Managing Director Salim Sayani, Othman Ghedira, Sale Director Airbus Middle East and Pascal Lesaulnier Vice President - International Development Middle East EADS, the Toulouse-based European planemakers.

Yousufzai emphasised that PIA and EADS have a long relationship that started with the induction of A300-B4 in early 80s and was strengthened further by the purchase of A310 aircraft in 1991. ATR42-500, another product of sister concern of Airbus both working under the umbrella of EADS, have further strengthened the ties between the two organisations.

“The purchase of these aircraft is an important step towards accomplishment of Business Plan 2020. As part of its fleet replacement plan, PIA will induct at least one new narrow body aircraft in the coming months to replace its aging fleet and improve the airline’s image,” he hoped.

PIA’s liabilities and losses today are about Rs150 billion while the airline is losing daily Rs70 million. To keep the airline flying Islamabad had recently doled out Rs8 billion. At present PIA has a fleet of 39 aircraft but almost a dozens were grounded due to lack of funds to buy spare parts and engines.

The national carrier’s current plight had been blamed on interference by the government, appointment of handpicked men at the top level and alleged irregularities in financial matters.

Earlier on Tuesday, PIA signed an agreement in Islamabad for the purchase of Boeing 777-340ER with deliveries starting from 2015. PIA will pay for the aircrafts from its own resources as the government had already refused to make any further payments.

The deal between Boeing and PIA was inked at PIA office in Islamabad and under the agreement PIA will acquire five Boeing 777 family aircraft with deliveries starting in 2015, the first will be delivered in March 2015, second in April 2015, third in July, fourth and fifth in September and November 2015.

PIA presently has nine Boeing 777s and with the induction of five additional fuel efficient aircraft the airline will serve its customers better and become profitable.

Boeing and PIA signed MoU during Dubai Airshow in November 2011 and PIA successfully negotiated the deal at a price 13.5 per cent lower than the price of aircraft delivered in 2008.

The ceremony was attended amongst others by Defence Minister and Chairman PIA, Chaudhry Ahmed Mukhtar, Boeing’s Miguel Santes as well as acting Ambassador of US, Richard Hogland.

— business@khaleejtimes.com