Home Global Village PIA buys four smaller aircrafts on a Rs 13 billion credit line

PIA buys four smaller aircrafts on a Rs 13 billion credit line

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News Analysis |

 The National Flag Carrier that has embarrassed the country internationally with its corruption cases, runway accidents, staff’s thievery, wrong landings, missing cargo and the occasional rats, is all set to acquire four small aircrafts under its new dry lease strategy in what is being coined as a ‘bail-out’ plan.

“(Upcoming) narrow-body aircraft will replace four A320s in the fleet,” PIA spokesman Mashood Tajwar told an online publication, commenting on the move. The aircrafts would be leased on dry terms; without crew, ground staff, etc, for a period of six to eight years, he informed.

Mr Khokhar informed the committee that PIA had agreed not to receive 47,500 euros, the price at which the aircraft was sold, and decided to pay it for the aircraft’s parking charges at the museum.

He also said that for this intention PIA might utilize the available credit line offered by commercial banks, amounting up to Rs. 13.2 Billion. This credit line will be given out keeping the government of Pakistan as the guarantor. The airline is looking for those narrow-body aircraft that have the capacity for over 120 passengers. “A320s and Boeing 737s may meet requirements of the airline,” Tajwar added.

He said jets were being acquired to fill the gap that would emerge after the return of four A320s to Vietnam, which had been acquired in August 2017 on a wet lease for six months to run its Hajj operations. The spokesperson informed that these aircraft would be unanimously returned next month to their parent company.

Read more: PIA will suspend flights to New York: Will it help?

The narrow-body aircraft cover short to medium distances. In Pakistan’s case, they are run on domestic routes like Karachi-Islamabad-Lahore and fly to nearby international destinations like the Gulf States.

The national air carrier also announced that it had started flying between Lahore and Muscat twice a week. With this, the number of flights from different airports of Pakistan to Oman has risen to 11 per week. “Lahore is a big city that attracts passengers from several parts of Punjab,” the spokesman said, adding PIA was already operating flights to Muscat from Sialkot and Islamabad airports.

“The aircraft could have fetched more money had it been sold as scrap,” said Aliya Kamran. She also highlighted that the plane was used in an anti-Palestinian film, which also hurt the sentiments of all Pakistanis.

“More flights will be operated on (other) profitable routes with better services to the passengers with the aim of increasing revenues of the airline, which will bring profit,” PIA CEO Musharraf Rasool Cyan said in a statement.

Responding to a query, the airline’s spokesman said that the airline would operate direct international flights on short-to-medium routes from multiple airports of the country.

However, for long routes, PIA will mostly fly passengers from across the country to the Karachi airport and from where they will be connected to their international flights. “Small jets are operated on short-to-medium routes whereas long-haul aircraft are used on long routes to make the flights commercially viable”, he said. PIA is now operating three flights per week from Karachi, three from Islamabad, two from Sialkot, one from Peshawar and two from Lahore to Muscat.

PIA was recently under fire for a heavier scandal than its routine gigs. In Dec 2016, one of the four Airbus, A310 aircraft, was sold to Leipzig Museum, Germany, without following procedures.

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A committee was formed under cabinet secretariat to probe the matter and present its findings to the standing cabinet committee. The committee was informed that the German authorities were demanding more than 200,000 euros parking charges for the aircraft, including charges for altering a terminal at an airport.

PIA was recently under fire for a heavier scandal than its routine gigs. In Dec 2016, one of the four Airbus, A310 aircraft, was sold to Leipzig Museum, Germany, without following procedures.

The issue of the sale of an Airbus A310 was brought to attention by a notice moved by JUI MNA Aliya Kamran in a National Assembly session. She inquired why the aircraft was sold for only 47,500 euros.

“The aircraft could have fetched more money had it been sold as scrap,” said Aliya Kamran. She also highlighted that the plane was used in an anti-Palestinian film, which also hurt the sentiments of all Pakistanis.

The assemblage learnt that four Airbus A310-100 aircraft were inducted by PIA in 1993. After completing 20 years of service, PIA had decided to offer these aircraft in the open market by inviting tenders in July 2016, but the national flag carrier received no bid at all.

Read more: Nation mourns tragic crash of PIA’s flight PK-661 enroute to Islamabad,…

The scramble learnt that former director Procurement Air Commodre Imran Akhtar proposed the sale of the aircraft and was approved by the then PIA CEO Bernd Hildenbrand; whose name was removed from the exit control list on the condition that he will be back within 30 days but he never returned, Joint Secretary, Aviation Division, Abdul Sattar Khokhar told the committee.

The narrow-body aircraft cover short to medium distances. In Pakistan’s case, they are run on domestic routes like Karachi-Islamabad-Lahore.

Mr Khokhar informed the committee that PIA had agreed not to receive 47,500 euros, the price at which the aircraft was sold, and decided to pay it for the aircraft’s parking charges at the museum.

The PIA Board of Directors was not taken into confidence. “The sale of the aircraft was the sole decision of the German CEO,” said Abdul Sattar Khokhar. The committee has summed up its findings and taken Prime Minister Shahid Khaqan Abbasi in the loop to make a decision on the graft.


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