PIA employees irked by leasing of new aircraft

Unions allege management is spending money on leases of new planes rather than repairs.

LAHORE:

The decision by the management of Pakistan International Airlines to lease two B-747 Jumbo Jets from Hellenic Airways has caused a revolt amongst its employees. Last week, a joint action committee of employees told the management that airline employees will not provide any service on the leased aircraft and will demand the management to bring its own fleet into operation.

PIA’s flight operations are still facing difficulties maintaining flight punctuality due to a shortage of aircraft after some planes were grounded because there were not enough spare parts for their repairs. Rather than purchase more spare parts, however, the state-owned airline has leased two planes from the Greek airline at a cost of between $10 million and $12 million, which employees say could be used to have eight to 10 engines overhauled.

Yet PIA’s management is not stopping there. After the B-747s, the company plans to lease A320s along with hiring an operating cabin and cockpit crew.

The employee unions and representatives argue that if more aircraft are needed after bringing PIA’s own fleet into operations, it should opt for Boeing 737s which are already in service in PIA and the airline has a full staff and technical strength, but the priority should be to make PIA’s own fleet.

The cancellation of around 1,200 PIA flights between August and November 2011 has inflicted a loss of around Rs410 million to the airline. The joint action committee alleges that the move was planned by the management, which they say has deliberately grounded an average of six to 15 aircraft since August 2011.

PIA has leased 3 engines at a rate of $300 per hour per engine, while its own engines are overhauled and ready for installation at Singapore and Amman, say employees. The unions are particularly critical of the contract for the supply of spare parts with a Dubai-based company called Transworld. The company, which offered a $700 million credit line, did not provide any benefit to the national flag carrier’s inventory problem, they allege.

When contacted, PIA spokesman Sultan Hassan said that Transworld “always provides spare parts in time”. However, he added that in case of a delay, PIA purchases the required equipment from the open market and the company reimburses the amount that PIA spends. “We need spares of around $40 million annually for our entire fleet,” he said.

Surprisingly, owing to a lack of resources, even fuel is being taken out of one aircraft to service another plane. The crunch of resources is so bad that there is not even enough space to service an aircraft. Hangars are filled to the brim and if a new plane arrives for servicing, one of the parked planes has to be brought out.

The hangars also contain two Boeing 747-300 planes. The latest induction into the PIA fleet is also spending much of its time parked. The F27 ATRs were reportedly purchased not on the basis of thorough reports but on recommendations made by some experienced engineers at the time.

Critics also oppose PIA’s deal with Transworld, saying that the parts company specialises in military, not commercial aviation.  “Since October 2011, PIA has sent 1,800 inquiries to Transworld and only 200 have been responded to so far,” said Suhail Baluch, the president of the airline pilots’ union. “Purchase orders have also yet to be passed.”

Transworld has told PIA to pursue original equipment manufacturers (OEM) for the remaining queries.  But while he confirms that this is true, Khalique defends PIA’s decision. “PIA does not have the money [to purchase equipment]. Transworld enables us to make the transaction on a credit basis.”

Some officials say that PIA did not need to sign an agreement with Transworld as it has its own inventory that stores equipment worth billions of rupees.

PIA’s reliance on Transworld also causes repair delays, sources say. “Aircraft manufacturing companies usually provide a list of approved vendors for purchase of spares. Airlines then select specific vendors at different stations, considering their flight schedule. Thus, if an aircraft needs a spare part anywhere in the world, an on-spot vendor will provide it.

In PIA’s case, if an aircraft needs a spare in London, it has to be transported from Dubai [where Transworld is based]. This takes time and the airline has to face heavy losses in the form of fees and hotel stay for passengers.”

Published in The Express Tribune, January 3^rd, 2012.