Pakistan International Airlines (PIA) announced the induction of an Airbus 320 in its fleet and plans to include two more such planes to bolster domestic and regional flight operations.
The 180-seat aircraft has been dry leased from GE Capital Aviation Services for a period of six years at a critical time when the country’s aviation sector has been under immense scrutiny.
“It is an achievement of PIA employees that they made sure this deal materialised because no one is enthusiastic about giving us planes,” said PIA Managing Director Junaid Yunus. “And we badly needed new aircraft.”
PIA recently returned four A-320s and Boeing 727-800 aircraft, which it had brought in on a much shorter wet lease in December 2013. It now has 31 aircraft in its fleet with an average age of 16 years but some of them are 24 to 27 years old.
“We need newer, fuel-efficient planes like A-320s to run on shorter routes within Pakistan and in the Middle East. Around 74% of our business comes from these places. If we only have 14 such aircraft, this airline would come out of the red,” said Yunus.
The state-owned carrier has been struggling to arrange funds for leasing more planes for months now. However, it plans to open another tender for another 10 narrow body aircraft. Insufficient numbers of aircraft was also one reason that led PIA to book its worst loss of Rs43.65 billion in 2013. “There is nothing we can do without the planes,” says Yunus.
The government has all along maintained that PIA and other loss-incurring public sector enterprises, which are a drain on the national exchequer, will be privatised. PIA is now hanging in the balance as government support remains imperative for its revival.
It pays billions of rupees every year in interest payments, shrinking its limited margins. The loans also requires it to seek government guarantees as banks are reluctant to lend the airline on basis of its balance sheet with entire equity being wiped out after successive losses.
On its part, the airline has taken multiple steps to regain the market share lost to domestic and regional carriers. It is focusing on improving its products by adding facilities like Wifi and phone service to appease customers.
Published in The Express Tribune, June 29th, 2014.
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COMMENTS (8)
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Firstly, there is no such aircraft as '727-800', and the picture shown is a Boeing 777, whereas your story is about Airbus A320.
“It is an achievement of PIA employees that they made sure this deal materialised because no one is enthusiastic about giving us planes,” said PIA Managing Director Junaid Yunus.
You meant no one is enthusiastic about giving you free planes? If you pay in cash, why would anyone refuse?
Just one A-320, this is too little too late. To make PIA functional up and flying, just take away the perks of a free ticket to PIA employees. Also the staff should be reduced to a good half the current strength. PIA is drowning in its own weight of over staffing with which comes the lack of professionalism. PIA was the top three airline in the world in 60's and 70's. what a shame.
Real problem with Pakistani institutions is that it needs to induct genuine professionals rather than hiring friends and relatives.
Privatization is worst choice, which is done of the helm of IMF for peanuts and apolitical choice to avoid layoff. Pakistan is paying $ 2 billion plus annually to its foreign shareholder. What measures have been taken to pay back profit in foreign exchange.
The statement of PIA MD Junaid Younus clearly hints that he is another bad choice with no vision. If PIA incurred worst historical loss of Rs 43.65 billion in 2013 then why PIA failed to cut its unnecessary expense by slashing its expenditure? PIA is over staffed, which needs to fire its unproductive staff. Furthermore, pick 3-year old record of overseas station and close all loss making business units and then peruse for the required aircraft's.
The arithmetic is very simple that if PIA needs 14 narrow bodied aircraft to get out of red, as is left with only 31 aircrafts with some of them as old as 24 & 27 years.
This means half of the expenditure should be immediately slashed, which will do the needful, but PIA MD's statement that he could nothing without planes is a clear message that he is helpless to take administrative measure, as it is political decision to reduce staff and close loss units. This is why privatization is the preferred choice for current government. So, "Who will bell the Cat " !
Thanks ET to provide such information, lets pray for PIA to progress more and more...
you need to make a correction the new A320 will replace the 737-800 not the 727-800
Please correct: Aircraft in picture is a 777. The aircraft returned were a320s and 737-800s not 727.