PIA’s plane seized once again in Kuala Lumpur

This marks the second time in three years that the same plane has been impounded in Malaysia due to disagreements with the leasing company 

On May 29, Pakistan International Airlines’ (PIA) flight PK894 from Islamabad to Kuala Lumpur was impounded by Malaysian authorities. This marks the second instance in a mere three years that PIA’s Boeing 777-200ER, registered as AP-BMH, has been seized by Malaysian officials. 

The decision is a consequence of a protracted and contentious dispute between Peregrine Aviation Charlie Limited and PIA, dating back to 2020.

Who is Peregrine Aviation? 

Peregrine Aviation is an investment entity established by NCB Capital. In December 2017, AerCap Holdings NV agreed to sell 21 aircraft worth $800 million to Peregrine Aviation. AerCap provided lease management services to Peregrine and retained an equity interest in the entity. The portfolio consisted of a mix of wide-body and narrow-body aircraft, including two Boeing 777-200ER aircraft used by PIA: AP-BMH and AP-BMG.

Peregrine Aviation vs PIA Round 1: The 2021 impoundment  

In January 2021, Peregrine Aviation initiated legal proceedings against PIA for failure to pay over $14 million in lease payments for two aircrafts. Peregrine obtained an ex-parte injunction to ground one of the aircrafts, AP-BMH,  at Kuala Lumpur International Airport. The court granted the injunction and the aircraft was detained. After two weeks of negotiations, the parties reached a settlement and the court permitted the release of the aircraft.

Peregrine had previously alleged that PIA stopped making payments in June 2020 and filed a case in the High Court of Justice in London. An ex-parte injunction is a legal order made without the presence of the opposing party. An inter-partes hearing is a court proceeding where both parties are present. A mandatory injunction is a court order requiring a party to perform a specific action. In this case, Malaysia Airports Holdings Berhad and its subsidiary were ordered to prevent the aircraft from departing.

Peregrine Aviation vs PIA Round 2: This week’s impoundment 

On May 29, PIA’s AP-BMH was impounded again by Malaysian authorities upon its arrival in Kuala Lumpur. The seizure was precipitated by an ongoing dispute between PIA and the leasing company over non-payment of dues amounting to approximately $4 million. PIA’s Head of Marketing and Corporate Communications, Abdullah H. Khan confirmed that the leasing company in question was AerCap  —  the very same AerCap that was sold to the aforementioned Peregrine Aviation in 2017. 

This incident marks yet another contentious chapter in the tumultuous relationship between PIA and Peregrine Aviation. In response to the detention of AP-BMH, PIA deployed another Boeing 777-200ER, registered as AP-BGK, to repatriate the stranded passengers and crew. AP-BGK landed in Islamabad at approximately 07:56 and was expeditiously assigned to operate the Islamabad-Kuala Lumpur route scheduled for June 1.

PIA’s statement on the matter

PIA has engaged its legal team in Kuala Lumpur to rigorously contest the impounding of one of its Boeing 777 planes. The leasing company had approached a local Malaysian court seeking impounding on claims that PIA owes $4.5 million to them. However, PIA’s official response stated that the actual payable amount was $1.8 million and had already been paid. 

Khan relayed all of this information in a press release and said that the claim submitted to seek impounding was incorrect and that the said Boeing 777 plane is owned by PIA itself while the leasing company only owns one of the engines mounted on the plane.

Daniyal Ahmad
Daniyal Ahmad
The author is a member of the staff, and covers the automobile, energy and advertising insdusties as a sector analyst. He can be reached at [email protected]

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