Summary
- Pakistan International Airlines (PIA) sends a delegation to Jakarta in an effort to resolve a longstanding dispute with AirAsia over two leased aircraft.
- The dispute arose when AirAsia refused to accept the aircraft back due to alleged contractual non-compliance on PIA’s part.
- PIA’s financial troubles are further exacerbated by this dispute, as the parked aircraft are incurring significant storage fees and other expenses.
Pakistan’s flag carrier, Pakistan International Airlines (PIA), sends a seven-member delegation to Jakarta, Indonesia, to resolve a dispute involving two Airbus A320 aircraft the airline operated. The dispute has been ongoing since the airline returned two A320s to its lessor, AirAsia, in September 2021.
The lessor has refused to take the jets back, saying that they do not meet the contract criteria. The losses due to the ongoing dispute add to the ongoing financial turmoil the airline has been going through in recent years.
The leased A320s for PIA
The national carrier of Pakistan leased two Airbus A320s from AirAsia on a six-year agreement in 2015. The pair of jets delivered new to AirAsia in 2006, were leased out to PIA in September and November 2015. At the end of the lease term, PIA offered to buy the aircraft from the lessor, but the offer was declined. PIA returned the two aircraft in September following the third-party inspection at the end of the lease term.
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The inspection conducted in Indonesia revealed that the aircraft were not in the condition agreed upon in the contract. Issues with some parts of the aircraft revealed that the required C Checks were not performed by the airline. As such, AirAsia refused to accept the aircraft.
PIA denied all allegations pertaining to the condition of the aircraft and said that they were in good condition for return. The aircraft has since been stored at Soekarno-Hatta International Airport (CGK). The dispute has been going on since that time, costing PIA hundreds of thousands of dollars each month.
Possible negotiations with AirAsia
The authorities at the national airline have now sent a team of seven members to Jakarta to possibly resolve the longstanding dispute. The delegation is headed by Saif Anjum, the Secretary of Aviation. The team also includes the Chief Executive Officer of PIA, Amir Hayat, the Chief Technical Officer, and the Chief Financial Officer of the airline.
Photo: jremes84/Shutterstock.
The parked aircraft are costing PIA millions of dollars in storage fees and other expenses in Indonesia.
According to Islamabad Post, the airline, yet again, offered to purchase the aircraft for an additional $30 million but has not heard back from the leasing company. PIA aims to resolve the dispute once and for all and possibly bring the two aircraft back into service with PIA. This is going to be a final effort in the dispute, and the authorities are eager to make a decision on this.
An ongoing financial turmoil
PIA has been going through severe financial turmoil for the last few years. The government of Pakistan aimed to find private investors for the loss-making airline, but continued efforts have gone in vain. From staff strikes and growing demands for better pay to the refusal of a bailout from the government, the airline has seen it all in recent months. The airline is projected to lose nearly $400 million in 2023. While the airline is trying its best to keep its head above water, it certainly is running out of options that can ensure its survival.
What are your thoughts on the PIA’s aims to resolve the dispute by sending a delegation to Jakarta? Do you think the airline can get back the two jets into its fleet? Tell us in the comments section.
Source: Islamabad Post