KARACHI: While Pakistan International Airlines is expected to buy more aircraft as part of its business strategy, owing to a costly leasing deal, it has agreed to withdraw four ATR aircraft from its existing fleet of 30.
On Saturday, one of the four ATR aircraft was dispatched from Karachi to Johannesburg, while the other three were soon to be dispatched to the companies from which they had been purchased on dry lease by the national flag carrier.
12 Boeing 777s, 11 Airbus A-320s and seven ATRs are part of the PIA’s fleet.
Since the leasing deal of the four ATRs was terminated, the carrier will have to fly the existing ATR aircraft on short routes in order to make them financially viable.
In a tweet, a PIA spokesman said that the first ATR-72 aircraft, with registration number APBKY, left Karachi for Johannesburg, South Africa, while three more ATR-72s will be returning.
Three remaining ATR planes to be operated on short routes
He said the operating costs and estimated market value of the ATR-72 aircraft were high making flight operations non-profitable.
These aircraft were bought on lease in 2015 and are more expensive than the existing market price, however owing to the compliance of a long-term deal, PIA encountered trouble returning them.
He said the management carefully checked the lease agreement and took advantage of a clause in the document during the suspension of flights due to the Covid-19 pandemic, on the orders of the former PIA chief executive officer, Air Marshal Arshad Malik.
When on the deck, the ATR-72 planes on lease to PIA cost rentals. PIA officials reached a settlement without a cash charge to return the aircraft to the leasing firm. It’s below the expectations of the leasing industry,’ said the spokesperson.
He said the personal actions of the airline leader and the cooperation of his board of directors made such an arrangement possible because of the pandemic, under intense pressure on the aviation market.
It would save millions of dollars in rent to the national carrier, which would have been paid if the aircraft were to be in the PIA fleet, but would remain idle due to the pandemic, the spokesperson said, adding: the bleeding has stopped and the history has ended a costly transaction. This is a more course correction by the CEO of the PIA.
The PIA team was congratulated by Air Marshal Malik on the fruitful negotiations which led to the return of the aircraft. He said that at this critical moment, it was a complicated but inevitable decision.
He said that PIA would shortly induct new aircraft to its fleet under the oversight of the federal government, which would greatly boost the airline’s goods and services. New aircraft and better service expected by our customers for a long time will soon be realised.
PIA recently agreed to add eight additional narrow-body aircraft on dry lease to its fleet. Aircraft with a 170-plus seating capacity was planned to be delivered next year.
By January 11, the management of the PIA invited tenders from various parties to obtain the eight dry lease aircraft, which suggests that the airline would acquire the aircraft without a flight crew.