PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Discuss issues and news related to PIA, Pakistani airlines and Pakistan's civil & military aviation.
uzairali
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by uzairali »

“National” airlines can represent both a huge opportunity and challenge for developing countries.

Under the right conditions, these airlines can turn profits while also helping to contribute to the infrastructure of a country. Take Air Astana, for example, which has turned a profit every year for the past decade, and has contributed very nicely to the development of Kazakhstan.

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Air Astana 767

But then on the other end of the spectrum you have countries that invest hundreds of millions of dollars in their “national” airlines, only to have that airline never turn a profit. Well, unfortunately that seems to be the case with Colombo-based SriLankan Airlines at the moment.

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SriLankan A330

The airline was on an impressive growth trajectory, having taken delivery of A330s featuring a top notch business class product, and also having several A350 aircraft on order.

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SriLankan A330 business class

Unfortunately they’ve realized that their expansion goals may have been too lofty, as the airline is now cutting two of their three routes to Europe, and is leasing their brand new A330-300 aircraft to Pakistan Airlines at breakeven costs, since they realize they can’t turn a profit flying them.

On to top of that the airline has been trying to find another airline to take over their A350 order, though it seems they haven’t had much luck with that. Per Reuters, SriLankan will pay $170 million to cancel their first four A350 orders, which were to be leased through AerCap, the world’s largest independent aircraft leasing company. That’s a lot of money for the airline to just throw out the window for a mistake.

That doesn’t even cover the cost of canceling their whole A350 order, as the airline has four more A350s scheduled to be delivered around 2020, which the airline hasn’t yet made a decision on.

How poorly is the airline performing? Per the article:

Sri Lankan Airlines, which has taken on lease seven Airbus A330-300s since 2012, has debt of around $3.25 billion.

It posted a group net loss of 16.3 billion rupees ($112.6 million) for the financial year through March 31, narrowing from the 31.4 billion rupees loss of a year earlier, due to lower oil prices. The carrier last posted a profit in 2009, a year after Emirates sold its stake in the venture.

The Daily News in Sri Lanka reports on how the current administration is blasting the previous administration for their order:

However, we are still compelled to bear a loss of 19.6 billion.We could have invested this huge sum of money to uplift the education in the country. We could have provided children books, text books and other necessary school equipment and built school laboratories. We could have built another 100,000 or 200,000 houses for the needy. The procurement of A350 airbuses have been carried out completely arbitrarily and without any transparency. Unfortunately, we are compelled to pay the heavy price for the sins committed by them during the previous regime,” Finance Minister Ravi Karunanayake explained.

Finance Minister Ravi Karunanayake further said that the duty and responsibility of the media is to expose these types of corruption and malpractices. Ms. Mela Karunanayake and several former Colombo Municipal Councillors were also present at the event.

I can certainly see both sides here. There has been a lot of corruption with the Sri Lankan government and with SriLankan Airlines management, though I’m not sure if that’s related to the airline supposedly overpaying for the planes.

That being said, I don’t necessarily think that positioning these planes as unnecessary “super luxury” planes that can fly for 17 hours is fair either. The A350 is very fuel efficient, and in theory under the right conditions it can turn a very nice profit for airlines. At the same time, given SriLankan’s financial situation, they might be much better off buying or leasing used aircraft, given that they can be purchased at a tiny fraction of the cost of new planes.

Bottom line

I’ve enjoyed my flights on SriLankan and have found them to be an overall good airline. On one hand it was great to see them reinvent themselves and modernize the airline, but at the same time Sri Lanka is a really tough country out of which to run an airline. Colombo is known for having among the world’s cheapest airfare, so that’s not exactly a good starting point for an airline looking to turn a profit flying brand new planes.

It’s sad to see the airline downsize significantly, but in reality that might be the only way they can decrease their losses.

No matter the conditions, paying $170 million to cancel an airplane order sucks…


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Perhaps PIA can lease those 4 a350s and save $170m?
yyzflyer
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by yyzflyer »

What is the current size of PIA fleet with all the different aircraft types ? (dryleased or financed-to-own) ??
They should add more frequency for Toronto and NewYork and offer alternate to the ME-3. A non-stop to/from Pakistan from NorthAmerica can do really well, if not NY then YYZ should be more flights. A daily 777 would be great, with improved onboard service for all passengers.
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by Abdullah »

Second A330 to arrive soon. Expected on 20th Nov 2016.
uzairali
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by uzairali »

Umar Farooq wrote:Second A330 to arrive soon. Expected on 20th Nov 2016.

All a333 have flights to fly up till 19. I doubt there is one coming on the 20th. PIA can not be given the aircraft the next day, there will be inspectione tc.
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by KSKJADOON »

My parents travelled from Islamabad to Heathrow on Sunday 20th Nov and they feel it was a Brand New PIA Premier Aircraft and were very impressed with the service. Almost everything in that aircraft was new and operational.

It reminded them of the PIA standard of the 60s and 70s on this route.

I'm not sure if it was the second A333 or not but it is worth writing about.
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Abbas Ali
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by Abbas Ali »

Good to know passengers were impressed with the service.

PIA Premier flights still performed by single Airbus A330-300 (4R-ALN) wet leased from SriLankan Airlines.

I think actual credit goes to SriLankan Airlines personnel for maintaining that aircraft in good condition and it must be one of the reasons it's member of Oneworld airline alliance.

PIA can take credit for in-flight meals, cabin crew service etc.

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uzairali
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by uzairali »

https://www.flightradar24.com/data/aircraft/4r-alr

hasn't performed flight since nov 21 5:30am pakistan time. Possibly next wet lease
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by uzkt01 »

It just flew to TRV :P
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by Abbas Ali »

PIA Premier service is suffering losses, according to news report on following link:

http://nation.com.pk/national/24-Nov-20 ... ses-to-pia

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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by Abbas Ali »

PIA will convert Airbus A330-300 wet leased from SriLankan Airlines for PIA Premier service into dry leased aircraft to be operated by all-PIA crew, according to news reports.

It also means the A330 will be registered in Pakistan.

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Abbas Ali
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by Abbas Ali »

PIA bids invitation in today's (December 6) newspaper for the procurement of aluminium oven racks and over inserts for Airbus A330-300 aircraft.

A-300-300 should be read as A330-300.

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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by Abbas Ali »

Dec 06, 2016

Sri Lankan Airlines-PIA wet lease goes dry


Pakistan International Airlines (PIA) continues negotiations on the leasing of two more Airbus A330 aircraft from Sri Lankan Airlines while insisting the local airline authorities to revise the previous wet lease agreement with a discount on the previous aircraft acquired by them, Pakistan government aviation sources reported.

The PIA has delayed the installment payment for the wet lease of Airbus A330 aircraft from Sri Lankan Airlines as the airline has already made a request for discount for the Airbus deal.

The Sri Lanka Airlines top management has written to the PIA expressing its concern on the delay of the lease payment while stressing the need of the airline to stick to the terms and conditions of the lease agreement, Pakistan aviation sources said.

The newly-hatched PIA deal with Sri Lanka Airlines has failed to break even at the least due to non payment lease installment by the Pakistani side.

The PIA has also planned to convert recently acquired aircraft into dry lease after the airline gives an ample training to its crew on new technology, an official said.

A Special Committee on Performance of PIA was briefed on the launch of premier service by PIA, its impacts so far and terms and conditions of the wet lease with Sri Lanka and reasons of not starting this service between Karachi-London, said a notice of Pakistani Senate Secretariat recently.

Pakistan news agency reports quoted airline’s spokesman Samir Nizami as stating “With the passage of time, our own personnel will be trained on new aircraft and subsequently all such planes will be converted into dry lease,” “More aircraft will be acquired on dry lease.”

Source: srilankamirror.com
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Abbas Ali
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by Abbas Ali »

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According to ARY News, PIA is considering to shut down airline's PIA Premier service due to heavy losses suffered by this service.

In four months PIA Premier has suffered loss of more than seven hundred million rupees.

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uzkt01
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by uzkt01 »

That is why you shouldn't do experiments with a loss making airline like PIA. All this loss is obviously going to be paid by tax money. With all this money they could have easily installed new cabins in B777s and A320s.
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Re: PIA to Introduce 'Premium Service' With Airbus A330 on August 14

Post by Abbas Ali »

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According to DAWN News channel, suspension of PIA Premier service is being considered. PIA Premier service in which an Airbus A330-300 was acquired on expensive wet lease rates suffered loss of 800 million rupees in four months.

Islamabad to London PIA Premier flights suffered loss of 590 million rupees.

Lahore to London PIA Premier flights suffered loss of 236 million rupees.

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