PIA Takes Action to Resolve A320 Lease Dispute and Financial Challenges

Pakistan International Airlines (PIA) is actively addressing a longstanding dispute with a lessor that has left two A320-200 aircraft grounded at Jakarta Soekarno-Hatta since September 2021. A delegation, led by Pakistan’s current aviation secretary Shoukat Ali, along with PIA CEO Muhammad Amir Hayat and the airline’s director of engineering, is set to visit Malaysia to seek resolution. The dispute involves aircraft AP-BLY and AP-BLZ, leased from Ashe Aircraft Enterprises, a subsidiary of AirAsia Aviation Group. The aircraft were intended for maintenance in Jakarta but never returned, incurring monthly parking fees of USD21,000 each.

In related news, PIA has denied claims of potential disruptions to its Toronto Pearson flights due to unpaid bills to ground handler Swissport and fuel supplier Menzies Aviation. PIA clarified that the invoices have been settled, attributing the delay to time differences. Menzies confirmed all PIA accounts were up to date, while Swissport declined to comment.

The airline faced fuel supply challenges in Pakistan when Pakistan State Oil halted fuel flow at Lahore International. After paying PKR480 million (USD1.71 million), PIA resolved the issue, leading to stability in its fuel supply. The fuel bill for the first half of 2023 amounted to PKR48.34 billion (USD172.5 million), contributing to a half-yearly loss of PKR27.45 billion (USD98 million).

In mid-September, PIA secured approximately PKR18 billion (USD64.5 million) from two Pakistani financial institutions to stabilize day-to-day operations and settle outstanding expenses. The government aims to partially privatize PIA, projected to post a loss of PKR112 billion (USD401 million) in the current calendar year. The airline continues to address financial challenges and operational issues while actively pursuing resolutions to disputes and disruptions.