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

[Abbas Ali]

Today PIA Boeing 777-200ER registration AP-BHX performing Lahore to London Heathrow flight PK-757 instead of PIA Premier Airbus A330-300 (4R-ALN).

Apparently it means PIA Premier service is at least temporarily suspended.

https://www.flightradar24.com/data/flights/pk757

Abbas

[Abbas Ali]

According to a report in February 9 edition of English daily 'Business Recorder'.

"The wet leased SriLankan Airlines Airbus A330-300 had cost heavily to PIA, which had paid over Rs. 2.5 billion as rent of aircraft (US$ 8,100 per hour for guaranteed hours) that led to a colossal operating loss of over Rs. 3 billion during six months of PIA's much-hyped premier service".

Abbas

[khizer]

Must be Turkish Airlines Airbus A330-300 (TC-JOM) replacing SriLankan Airlines Airbus A330-300 (4R-ALN) for PIA Premier service.

Abbas

If it is dry leased, then what will be the registration of it? AP-BNP?

[khizer]

Srilankan A330-300 wet leased to PIA (4R-ALN) just took off from Lahore heading towards South . Do any one of you know where it's going? Karachi or Colombo?



https://www.flightradar24.com/4RALN/c6d460b

[Abbas Ali]

Maybe flying to Karachi before its return to SriLankan Airlines.

Probably PIA Premier markings to be removed at Karachi.

Abbas

[Abbas Ali]

4R-ALN landed at Karachi Airport at 10:16 AM apparently as ferry flight from Lahore from where it had departed at 8:45 AM.

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

Abbas

[Abbas Ali]

4R-ALN approaching Karachi Airport.



Abbas

[Abbas Ali]

Pakistan's Federal Investigation Agency (FIA) is going to investigate aircraft wet lease deal between PIA and SriLankan Airlines, according to following news report.

SriLankan Airlines fails in new bid to lease aircraft to PIA

By Bandula Sirimanna

SriLankan Airlines lost a fresh bid this week to win a Pakistan Airlines (PIA) A 330 aircraft wet lease tender following the end of its 6-month commercial contract of the first aircraft lease in a three-A 330-deal inked in August last year.

These developments had followed tough negotiations by the top brass of the national carrier over the past few weeks with their PIA counterparts who repeatedly requested for a discount on the original lease rental of the single A330 aircraft.

The PIA had also delayed the payment of lease rental in the August 2016 A 300 aircraft wet lease deal, an agreement termed ‘highly successful’ by SriLankan Airlines CEO Suren Ratwatte in a media release on Thursday. Earlier Capt. Ratwatte had attributed a delay in payment due those authorities being pre-occupied with a PIA plane crash on a domestic flight on December 7 and, bank holidays in the US over Christmas.

Earlier this week on Monday, just as the SriLankan Airlines wet lease arrangement with PIA was due to end on Friday, February 10, the PIA called for bids to wet lease A330 aircraft. In the earlier arrangement with SriLankan Airlines no bids had been called or a tender announced.

Three international airlines, Turkish Airlines, Sri Lankan Airlines and Hi Fly submitted bids for the new A-330 craft wet lease tender and the tender was awarded to Turkish Airlines, according to authoritative Pakistani aviation industry sources.

At the evaluation of the bids Hi Fly’s bid was rejected due to non availability of the desired aircraft, while Turkish Airlines received 32.8 points for its technical capability and 60 points for financial position. The only other competitor, SriLankan Airlines secured 36.4 points for its technical capability and 53.8 points of its financial position, the sources added.

Thus Turkish Airlines with 92.8 points won the tender outwitting SriLankan Airlines which received 90.2 points during the evaluation process.

The Turkish Airlines wet lease charge was around US$ 6000 per hour, much lower than the rate of $8100 per hour PIA paid for the earlier SriLankan Airlines plane. Though PIA has an option of taking two more aircraft under the earlier deal in addition to extending the lease after the first six months the airline appears to have opted to exit from all those options owing to the cost.

There had been intense negotiations last month between SriLankan Airlines and PIA which requested a discount on the agreed price of $8100, as it was higher than the industry market average of $6000. The discussions which included a request from PIA to offer the second and third aircraft at the market average hire rate, ended inconclusively.

The sources said that a Turkish Airlines A330 plane will be in Pakistan within the next two weeks while the SriLankan Airlines plane would be returned to rejoin the local fleet.

In August last year, PIA agreed to acquire three Airbus A330 aircraft from Sri Lankan Airlines on a wet lease – which includes use of the crew. CEO Ratwatte went on record stating that “PIA has agreed to take over the second A330 Aircraft on February 10, in accordance with lease agreement. The third aircraft will be taken over in March or April, subject to crew availability.” The first aircraft acquired by them was used for the Islamabad-London ‘Premier Service’, since its inauguration by Prime Minister Nawaz Sharif on August 14 in 2016.

In a statement on Thursday, Captain Ratwatte said: “This contract was the most profitable commercial agreement undertaken by SriLankan in the recent past. It has helped to uplift the bottom line of the company at a time when we are facing significant challenges in our efforts to transform the financial fortunes of our airline and return it to profitability.”

In what was most probably the last flight under the PIA banner, the SriLankan Airlines-owned A330 on February 7 was intercepted by RAF typhoon fighters while flying to London and forced to land at Stansted Airport. A Pakistani man wanted by the UK Metropolitan Police was reported to have been escorted off the aircraft after it landed, media reports revealed.

Meanwhile the Federal Investigation Agency (FIA) in Lahore is carrying out an investigation into the PIA A330 aircraft deal with SriLankan Airlines, Pakistani media reports revealed.

The inquiry against the PIA management into charges of corruption was launched as there were allegations of taking massive commissions from the deal, media reports said.

http://www.sundaytimes.lk/170212/busine ... 27878.html

Some more news reports related to the topic:

PIA ends lease deal with SriLankan, US$ 1 million in arrears

Pakistan’s national carrier has run up more than US$1 million in arrears for the Airbus A330-300 aircraft it wet-leased from debt-ridden SriLankan Airlines last year, authoritative sources said.

The crisis-ridden Pakistan International Airlines (PIA) suspended its lease with SriLankan on February 9 with US$1.3 million still outstanding. It will no longer lease two additional A330-300 aircraft from SriLankan as earlier planned, authoritative sources confirmed.

SriLankan Airlines management maintains, however, that the PIA wet-lease was one of the most advantageous deals the company has ever struck, earning almost US$9 million profit in six months. The figures could not be independently verified.

“They flew more than the contracted number of hours per month,” said Suren Ratwatte, Chief Executive Officer of SriLankan. “So the extra flying was practically all profit for us.” He refused to divulge numbers, saying those could only be calculated once the leased aircraft is returned and the last invoice is settled.

PIA announced in a statement this week that Pakistan’s national aviation policy did not allow it to wet-lease an aircraft for more than six months. It said it has now shortlisted another plane to replace its “PIA Premier” product that was operated on the SriLankan A330-300 between Pakistan and London. New aircraft are to be inducted into the fleet later this month.
The A330-300 that SriLankan leased out to Pakistan, complete with cockpit and cabin crew, is owned by Avolon Aircraft Leasing and Management Services.

It had been acquired by SriLankan in brand new condition. A monthly rental is still being paid to the lessor. In October last year, SriLankan cancelled its long-haul flights to Paris and Frankfurt on the grounds that the routes were loss-making. This was after it struck a deal in July of that year to lease out three A330-300 aircraft (which are used on long-distance routes) to PIA. The first plane was deployed in August on aircraft, crew, maintenance and insurance basis.

But the PIA deal soon came in for censure both here and in Pakistan. Critics say the SriLankan management should have been more circumspect in examining the financials of the Pakistani carrier which has long been in a monetary mess. In Pakistan, newspapers have flagged the high cost of the lease rental charged by SriLankan Airlines.

This week, Pakistan’s The Nation newspaper flagged the “hourly cost of US$ 8,500” charged by SriLankan was too high to have ever made commercial sense PIA. Journalist Amraiz Khan wrote that it exceeded both the revenue generated and the additional cost incurred by launching “PIA Premier”.

Meanwhile, sources from among SriLankan Airlines crew claimed they had not been given advance notice of the PIA lease ending on February 9. On January 31, rosters were published for the next 28 days with crew allocated to operate PIA sectors from Lahore and Islamabad to London.

“On 8th of February, a sudden mail was sent out to crew from the Chief Pilot that the PIA wet lease has ended with immediate effect and that crew rostered for PIA flights would be placed on alternate duty patterns,” a message circulated among staff said.

The cabin and technical crew were in Islamabad waiting to operate a PIA flight to London. “Hours later, they were stranded as the flight to London was cancelled and they were made to passenger to Karachi and then take UL184 to Colombo,” the message said.

Mr. Ratwatte denied that the lease ended suddenly. “We were expecting it,” he insisted. “The roster was just a plan. We had also been planning for the lease to end for weeks.” Meanwhile, the A330-300 aircraft was ferried from Lahore to Karachi for repainting yesterday. It is likely to be brought back to Sri Lanka on February 26.

SriLankan management will then have to decide how to use its three A330-300s which are a legacy from the Rajapaksa era. They each cost more than US$1 million a month. Curiously, the airline might return some leased A330-200s to the lessors in mid-2017, authoritative sources said. This means they must either ground their A330-330 long-haul craft or fly them unprofitably on short-distance routes which are mostly what SriLankan is now limited to.

http://www.sundaytimes.lk/170212/news/p ... 28319.html

SriLankan Airlines says aircraft lease to PIA ‘most profitable’

Feb 09, 2017 15:48 PM GMT+0530

ECONOMYNEXT – SriLankan Airlines said a ‘wet lease’ of an Airbus A330-300 aircraft to Pakistan International Airlines (PIA) under which it gave both the aircraft and the crew had been the most profitable deal done by the national carrier recently.

The aircraft, given for six months on Aircraft, Crew, Maintenance and Insurance (ACMI) basis, will rejoin the SriLankan fleet after it is repainted in the national carrier’s livery within the next couple of weeks, a statement said.

It gave no financial details of the deal.

“This contract was the most profitable commercial agreement undertaken by SriLankan in the recent past,” SriLankan Airlines chief executive Suren Ratwatte said.

“It has helped to uplift the bottom line of the company at a time when we are facing significant challenges in our efforts to transform the financial fortunes of our airline and return it to profitability.”

Ratwatte said the ACMI deal helped PIA to enhance the product offered and launch the ‘Premier Service’ brand on the key Pakistan to London service.

“We look forward to further commercial agreements with PIA and thank them for the opportunity,” said Ratwatte.
(COLOMBO, Feb 09 2017)

http://www.economynext.com/SriLankan_Ai ... 290-6.html

Abbas

[Ammar]

A bit awkward that the PIA website is plastered with images of the former Premier service with Sri Lankan Airlines Business Class.

[uzkt01]

A bit awkward that the PIA website is plastered with images of the former Premier service with Sri Lankan Airlines Business Class.

Well ofcourse they cannot advertise their early 2000s era 777 cabins

[Ammar]

I would argue if properly marketed there is still a demand, but yes, it's understandable they want to market the Premier product.
However, the UL aircraft are gone. Passengers booking flights expecting those seats are being tricked. Perhaps begin preparing for the TK cabins now?

[shj]

PIA has delayed the delivery of 2 Turkish A330 TC-JOM and TC-JON to March. It's funny because there was no mention of TC-JON on the tender. 2 A330s to join, apparently, on lease

[Abbas Ali]

Seems with two A330s they plan to expand PIA Premier service network by including Karachi, Paris, Barcelona, Leipzig and New York.

Islamabad, Lahore and London already part of PIA Premier service route network.

Abbas

[uzkt01]

PIA has delayed the delivery of 2 Turkish A330 TC-JOM and TC-JON to March. It's funny because there was no mention of TC-JON on the tender. 2 A330s to join, apparently, on lease

Perhaps they want another one for flights to JFK via LEJ. If this is the case where will 77L fly. May be PIA can consider selling them or exchange with 77W. YYZ can be reached non-stop using other 2 variants of 777s.

[raihans]

why PIA continue to wet lease A330s for Premier service, a while ago news were circulating that PIA's crew getting upgrade on A330s and PIA will be operating dry leased equipment for this service?