PIA and Indonesian Leasing Company Reach Agreement on Two Aircraft Custody
This development comes after PIA's decision to buy the aircraft instead of continuing with lease payments. A delegation of four key officials traveled to Kuala Lumpur for negotiations, with parking fees of $0.6 million per month unpaid for two years.
Karobar
Islamabad 10/16/2023: In an important development, Pakistan International Airline (PIA) and an Indonesian leasing company have successfully concluded an agreement concerning the custody of two PIA planes. This agreement stems from the non-payment of the lease amount by PIA and is set to have far-reaching implications.
The two aircraft in question are Airbus A320s, and it has been confirmed that they will imminently become part of PIA's fleet. This marks a significant turnaround for PIA, which initially opted to purchase these two planes rather than continue with lease payments. To facilitate this change, a delegation of four key officials traveled to Kuala Lumpur to engage in negotiations with the leasing company and secure control of the aircraft.
The delegation consisted of the Secretary of Aviation, retired Vice Air Marshal Mohammad Amir Hayat, CEO of PIA, Chief Engineer Amir, and Deputy Engineer. The non-extension of the lease for these aircraft was primarily due to PIA's failure to clear its outstanding dues in 2021. In the absence of regular returns, PIA was also required to cover the parking fees for these planes. Notably, it has been revealed that the monthly parking fee for both airplanes amounts to $0.6 million each, and this debt has remained unpaid for a span of two years.
The accumulation of fines and unpaid dues ultimately exceeded the original value of the planes. Faced with this financial challenge, PIA made the strategic decision to acquire the aircraft rather than continue servicing the existing debts. However, PIA faced a setback in this endeavor due to insufficient funds.
In a positive turn of events, the leasing company has shown a willingness to engage in negotiations with PIA in Kuala Lumpur, including the possible involvement of a third party. According to a PIA spokesperson, the combined value of both aircraft is estimated at $30 million. Once the finalization of the deal is reached, an engineering team will conduct an audit of the planes, the requisite payment will be made, and the aircraft will subsequently be handed over to PIA.
