ECC meeting: PIA given approval to induct new aircraft
Cabinet committee also approves extension in govt guarantees.
The national carrier had been posting operational profits for the last five years. Currently, PIA has 38 aircraft out of which 25 planes are in service. PHOTO: FILE
KARACHI:
The Economic Coordination Committee of the cabinet, in its meeting on Tuesday, accorded in principle approval for the acquisition of newer narrow body aircraft on dry lease to Pakistan International Airlines (PIA), which will improve the national carrier’s schedule reliability along with cutting back fuel costs, a spokesperson for the company said.
According to a press statement, the cabinet committee approved a special bailout package of Rs100.5 billion and a provisional business plan for the cash-strapped national carrier.
The ECC also approved extension in all sovereign guarantees extended to PIA along with approval of the airline’s request to provide support for additional funding to provide the carrier some fiscal space.
PIA is looking at buying around eight Airbus A320 aircraft on dry lease. The financing details have not yet been finalised. “We will probably get the delivery in the middle of April,” said an airline official.
A dry lease is a leasing arrangement whereby an aircraft financing entity provides an aircraft without insurance, crew, ground staff, supporting equipment, maintenance, etc.
The bailout covers fresh guarantees of Rs49 billion in 2013 to meet critical liquidity needs of the corporation, $46 million (Rs4.5 billion) for acquiring narrow body aircraft to replace ageing fleet, loan guarantees of Rs33.5 billion until June this year and borrowing of Rs13.5 billion from National Bank against a letter of comfort to be subsequently replaced by guarantees.
PIA was recovering from its ailing health. The national carrier had been posting operational profits for the last five years. Currently, PIA has 38 aircraft out of which 25 planes are in service. PIA had recorded cumulative losses of Rs141 billion from 2002 to 2012.
The ECC meeting was chaired by newly appointed Federal Minister for Finance and Economic Affairs Saleem Mandviwalla, whereas Minister of Defence Syed Naveed Qamar, Secretary Defence and PIA Chairman Lieutenant General (retd) Asif Yaseen Malik, PIA MD Muhammad Junaid Yunus and airline’s CFO Aftab Ahmed were also present.
The national carrier presented an interim business plan for the period 2014-18 to steer the airline into profitability. The ECC desired that a mechanism should also be placed to monitor the progress and operations of the airline.
Mandviwalla advised that the finance ministry will carry out the monitoring on behalf of the government, the spokesperson added.
Additional reporting by Saad Hassan and Raheel Ahmed
Published in The Express Tribune, February 27th, 2013.
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The Economic Coordination Committee of the cabinet, in its meeting on Tuesday, accorded in principle approval for the acquisition of newer narrow body aircraft on dry lease to Pakistan International Airlines (PIA), which will improve the national carrier’s schedule reliability along with cutting back fuel costs, a spokesperson for the company said.
According to a press statement, the cabinet committee approved a special bailout package of Rs100.5 billion and a provisional business plan for the cash-strapped national carrier.
The ECC also approved extension in all sovereign guarantees extended to PIA along with approval of the airline’s request to provide support for additional funding to provide the carrier some fiscal space.
PIA is looking at buying around eight Airbus A320 aircraft on dry lease. The financing details have not yet been finalised. “We will probably get the delivery in the middle of April,” said an airline official.
A dry lease is a leasing arrangement whereby an aircraft financing entity provides an aircraft without insurance, crew, ground staff, supporting equipment, maintenance, etc.
The bailout covers fresh guarantees of Rs49 billion in 2013 to meet critical liquidity needs of the corporation, $46 million (Rs4.5 billion) for acquiring narrow body aircraft to replace ageing fleet, loan guarantees of Rs33.5 billion until June this year and borrowing of Rs13.5 billion from National Bank against a letter of comfort to be subsequently replaced by guarantees.
PIA was recovering from its ailing health. The national carrier had been posting operational profits for the last five years. Currently, PIA has 38 aircraft out of which 25 planes are in service. PIA had recorded cumulative losses of Rs141 billion from 2002 to 2012.
The ECC meeting was chaired by newly appointed Federal Minister for Finance and Economic Affairs Saleem Mandviwalla, whereas Minister of Defence Syed Naveed Qamar, Secretary Defence and PIA Chairman Lieutenant General (retd) Asif Yaseen Malik, PIA MD Muhammad Junaid Yunus and airline’s CFO Aftab Ahmed were also present.
The national carrier presented an interim business plan for the period 2014-18 to steer the airline into profitability. The ECC desired that a mechanism should also be placed to monitor the progress and operations of the airline.
Mandviwalla advised that the finance ministry will carry out the monitoring on behalf of the government, the spokesperson added.
Additional reporting by Saad Hassan and Raheel Ahmed
Published in The Express Tribune, February 27th, 2013.
Like Business on Facebook to stay informed and join in the conversation.