Following news report confirms AP-BEQ as one of the grounded A310s.
PIA decides not to claim $15m from Airbus
Sunday, October 21, 2012
The decision of Pakistan International Airlines (PIA) not to claim its $15 million, paid to the Airbus - an aircraft manufacturing company, is really perplexing as its depleting fleet has reached a critical point because of dearth of funds, said sources in the national flag carrier on Saturday.
The PIA fleet is currently short of 12 engines in addition to the spare, required to run the national flag carrier on its full strength. In reply to a request for provision of the engines and parts, the GM Purchase Technical & Logistics refused any help, saying that all such procurement had been cancelled due to lack of funds, said the sources.
Airbus A310 Aircraft constitutes major volume of the PIA fleet of 39 aircraft. Among 12 aircraft, there are two different models being operated by the national flag carrier; six are powered by General Electric CF6-80C2 engines and the other six, formerly leased, by Pratt & Whitney PW4000 engines.
The $15 million was paid by the PIA as maintenance reserves over a period of eight years from 2003 to 2011 for the maintenance of six leased aircraft. However, because of a controversial decision, taken by the former managing director Nadeem Yousafzai, the lease was terminated in 2011, instead of lease maturity year 2015.
Experts said the PIA is on the receiving end as the aircraft would have been less than almost a quarter of their worth by the end of the scheduled lease as compared to the amount paid for them in 2011.
The airline has in-house overhaul facility for CF6-80C2 engines, while PW4000 were sent to the Eagle Services Asia, Singapore, under an agreement called Fleet Management Programme (FMP), said the sources.
The reconciliation deal revealed that the PIA management has agreed not to claim $15 million from the Airbus and adjust it in some future deal with the company.
Currently, one of the formerly leased A310 aircraft bearing registration AP-BGN is grounded almost for the last 10 months due to unavailability of engines. Four unserviceable engines are awaiting a decision about their fate for almost 10 months, as each one needs at least $6 million to become functional. Six more removals are expected in the middle of the next year, which will only lead to grounding of almost all A310 PW4000 powered fleet or will need an injection of $6 million each, said the sources.
A short-term improvement was seen during Rao Qamar Suleman period, who somehow managed to take bold decisions and re-appropriation of payment schedule to different vendors responsible for the maintenance of the PIA engines, they said.
The CF6-80C2 engines, which are being overhaul by the PIA Engineering on its own since 2007 is also facing an acute shortage of spares. It aftermath is very clear: the remaining fleet of A310 GE CF6-80C2 engine powered fleet will be on ground, joining an already grounded aircraft having registration No AP-BEQ.
Currently, the PIA is running without a chairman, a managing director, a chief financial officer, a director HR and a chief internal auditor, said the sources.
PIA General Manager Public Relations Sultan Hassan, when contacted, admitted that if a lessee acquires an aircraft, the amount available under maintenance reserves is returned to the lessee.
In this case, he said, the PIA is contractually obliged to continue the payment of rent and reserves till 2016, after which the aircraft would have been transferred to PIA along with the then available balance of maintenance reserves. The PIA management, after obtaining the approval of its board of directors, negotiated with the Airbus Leasing for early acquisition of the aircraft, he added.
Hassan said that as part of the deal, which was approved by its board, the PIA managed to purchase six aircraft and, after price adjustment of the aircraft, as well as other dues payable to Airbus, $15.1 million remained available with the Airbus. He said since Airbus had agreed on premature termination of the lease, they issued a credit note to PIA against which the national flag carrier could purchase / lease Airbus family products in the future. Until such time, that amount would continue to accrue interest for PIA, he added.Source: The News