ISLAMABAD: Financial crisis-hit Pakistan International Airlines (PIA) has been facing a $31 million dispute against outstanding rent, re-delivery rent, maintenance reserve and interest charges for the two aircraft and PIA expressed fear of potential confiscation of properties abroad and its aircrafts.
According to sources, Pakistan International Airlines Corporation Limited (PIACL) has received a court notice through Asia Aviation Capital Limited’s UK based counsel Herbert Smith Freehills for immediate payment of USD 31.3 million against outstanding rent, re-delivery rent, maintenance reserve and interest charges for the two aircraft. And PIACL has acknowledged the court notice and on its instructions, PIACL’s UK based counsel Norton Rose & Fullbright sought time from High Court of Justice, England and Wales, London to reply to AACL claims.
PIACL’s position in this matter is quite weak and legal experts have recommended the PIACL to find an out of court resolution with AACL not only with respect to the claimed amounts but also future liabilities with regard to rental payments and re-delivery of the aircraft, they added.
Sources said that Secretary Aviation led negotiation team had conducted negotiations with AACL for out of court settlement in the larger interest of the company and convince the AACL to settle the matter at a consolidate amount of USD 26 million which included transfer of title of two aircraft in two installments.
Earlier, the PIACL obtained two A 320 aircraft AP-BLY (MSN 2926) and AP-BLZ (MSN 2944) on lease for six years from Asia Aviation Capital Limited (AACL) in 2015. As per industry practice, the lease agreement required that the aircraft would be redelivered after necessary maintenance at a certified maintenance and repair facility (MRO). Accordingly, on the expiry of lease, PIACL positioned the aircraft at FL Technic MRO, Jakarta in September and October 2021. It was planned that the aircraft would be redelivered in six to eight months. However, this schedule could not be followed. This led to exchange of claims and counter claims between AACL and PIACL as to the responsibility for the delay, actual amount of the lease rent, penalties and interest to be paid to AACL. Moreover, the dispute in relation to the payment of lease rent led to litigation on two previous occasions i-e in 2019 and 2021 as a consequence of which PIACL was forced to pay USD 12.058 million to AACL.
As per sources, the Economic Coordination Committee (ECC) of the Cabinet had earlier considered a summary of the Ministry of Aviation regarding “ Financial Support to PIACL for settlement of outstanding dues to M/s AACL with Transfer of title of two A 320 Aircraft AP-BLY, AP-BLZ” but the forum (ECC) did not approve the proposal.
The ECC, however, agreed, in principle, for a bridge financing of PKR 8.0 million between PIACL and Pakistan Civil Aviation Authority for settlement and transfer of title of two A-320 Aircrafts, AP-BLY, AP-BLZ and to meet immediate working capital requirement.
The ECC further directed the Ministry of Aviation to handle the settlement agreement with AACL independently, given that it falls outside the purview of the ECC.
corruption, nepotism, bribery, incompetence…. this is PIA
It must be privatised. They are corrupt themselves I traveled many times two passengers only from Fsd to Medina sharif bcoz of politics and whatever I don’t know.
How long we will bear it.Despite airline closure,no fuel,staff get bonuses and increases from our pockets.From very core staff,admin and management is Chor dishonest,haraamkhori,,,in UK etc.,they hire their relatives on v lucrative salary in pounds and dollars,, better it shuts down,,19planes and 800pilots,, what is this,,bring some new airline leave it.1000 curse and laant upon them and it.
commenting on PIA condition is fatal as every body knows that who are responsible for this disastrous condition. whereas this country was freed at the cost of huge sacrifices of the people has been sunked in the neath of deep Atlantic Ocean.