Pakistan grounds two airlines for not paying dues

[Abbas Ali]

Shaheen Air resumes operation after payment

Aero Asia planes stay grounded

BY IQBAL MIRZA

KARACHI (May 25 2006): While Aero Asia aircraft remained grounded for the third day on Wednesday, Shaheen Air International (SAI) was cleared by Civil Aviation Authority (CAA) to resume its domestic and international operations from 1500 hours.

The clearance letter was issued by CAA following receipt of the cheque from SAI towards payment of the outstanding dues to the satisfaction of CAA.

Aero Asia, on the other hand, was insisting that domestic private carriers should be treated at par with the national carrier, PIA, a position not acceptable to CAA.

Aero Asia's stand is that since PIA is allowed a 45 days' credit facility, the same period be allowed to other private carriers as well, instead of the suggested 15 days' time period.

CAA's argument is clear. It says that PIA is owned to the extent of 88 percent by the government, which also provides guarantee, whereas, in the case of private carriers, no such guarantee is available. It, therefore, can not be treated equally on this count with PIA. The government does not provide any such guarantee in the case of private airlines, a CAA spokesman told Business Recorder here on Wednesday.

CAA believes that some private airlines purposely allow their outstanding amount to pile up and when the amount becomes too large they ask for easy instalments pay off their dues.

But, this time they were caught on the wrong foot. The tone and temper displayed by CAA negotiators indicated that they meant business and were in no mood to show any leniency in recovering the due amount, said an insider. SAI representatives were, however, quick in realising the gravity of the situation and made the payment as desired by CAA.

Aero Asia, it appeared, was waiting for the return of defence secretary from abroad to plead its case before him. According to CAA spokesman, SAI's initiative in making the payment had weakened the case of Aero Asia and the defence secretary may find it difficult to be convinced of its arguments.

Needless to mention, it was the defence secretary who in July last year had shown good gesture in allowing the private carriers to operate on foreign routes of their choice, but so far they have failed to oblige him. Their failure confirms the belief that they lacked the resources to accept the challenge.

Source: Business Recorder

[Abbas Ali]

Aero Asia services remain suspended for fifth day

KARACHI (May 27 2006): Aero Asia and Civil Aviation Authority (CAA) continue to remain engaged in a 'battle of endurance' over the payment of dues, which has resulted in suspension of its operations, both foreign and domestic. Aero Asia continues holding its ground.

Friday was the fifth day that all its aircraft remained grounded with no immediate possibility of resuming operations. It was unlikely that CAA would bend on its decision, which paid dividends in the case of SAI.

Aero Asia is waiting for the return of Defence Secretary to plead its case before him. The Defence Secretary is on leave up to May 30. Till then it appeared prepared to sustain the loss which, according to rough calculations, would be up to Rs 2 to 3 million per day.

Aero Asia, according to aviation experts, is taking a 'blind risk' and not a 'calculated risk', because the Defence Secretary may or may not oblige it on the issue of payment, particularly at a time when SAI has made the payment to the satisfaction of CAA.

Source: Business Recorder

[PK777]

Similarly, Aero Asia owed Rs357 million to the CAA and Shaheen Airways was defaulter of Rs425 million. The report also marked Bhoja Air as defaulter of Rs81 million, Hajvari Airline Rs40 million, Raji Air Rs12 million and Safe Air Rs10 million.

Aero Asia has got such an attitude problem... I hope CAA sticks to what they have said..otherwise there goes another 13 years of no improvements.....

Who is this Raji Air ?? Are these the likes of Pearl/Safe Air that still have to start?

[qaume]

this is CAA's bullcrap honestly...

they are treating PIA on different terms than the others

Shaheen is still run partially by the air force, regular rules don't apply to them since they can run international flights and don't have to run domestic flights

PIA can do whatever the hell it wants, Aero Asia and Shaheen never defaulted until PIA stopped paying the CAA what it was owed creating unfair situation for the smaller private airlines

If CAA wants any respect as a legitimate organization they need to get up off their lazy asses, kick some PIA ass, and set rules in-place that are FAIR FOR EVERYONE not special treatment

anyways, CAA is screwing themselves over... if Aero Asia does not resume operations then they stand to lose out millions of dollars each year... AA may have defaulted a few years ago in response to PIA refusing to pay CAA, but they have made regular payments and helped drive an increase in labour class flying, but they still pay millions of dollars to CAA each year and the fact that CAA doesn't seem to care about this shows how moronic they infact are

we can all criticize the smaller airlines for not being world class carriers, teh fact is that the government is full of shit, and has done a disservice to private industry by keeping the behemoth cash consuming dinosaur PIA in govt. control.. it needs to be liquidated ASAP and private airlines need to be given concessions so that they are able to compete and aren't facing unfair price competition from PIA and its fellow conspirator CAA

[qaume]

i just hope if AA/Shaeen fail, at least airblue kicks PIA ass.. govt. oppression of private industry must stop, special treatment must stop

hopefully the CAA becomes privatized soon too and they fire all the idiot generals running it getting free flights from PIA to keep our industries down

people wonder why Indian Aviation is so successful now.. govt. actually wants industry to succeed there.. in Pakistan we have a backwards approach to private industry.. our businesses are much more capable and are thinking 10-20 years ahead of the Indians (we had 4-5 private airlines way before India even had 3) but our dumbass government has the brains of an ape and doesn't know when to dump a dinosaur (PIA)

[behramjee]

just hope if E4/Shaeen fail,

Both these airlines are pathetic...I have flown Aero Asia KHI-LHE in 1996 and found it to be the worst ever. My dad once flew Shaheen PEW-KHI and said the same thing about it. Both these airlines should indeed be kicked hard no doubt but so should PIA for the Rs 2.9 billion that it owes the PAK CAA.

If CAA wants any respect as a legitimate organization they need to get up off their lazy asses, kick some PIA ass, and set rules in-place that are FAIR FOR EVERYONE not special treatment

Very true...but the PAK CAA should also know that if it wants to charge heavy landing fees which are more expensive than better neighbouring airports such as DXB-AUH-KWI than it should offer similar facilities and reduce the cost of aviation fuel. Bascially offer VALUE FOR MONEY TO ITS AIRLINE CUSTOMERS.

If it cant then it should have similar fees as that of SHJ airport (Sharjah) which would encourage more international airlines to come to PAK due to new reduced costs of landing etc. In the SAARC region DAC and KHI are the most expensive airports to fly into.

they are treating PIA on different terms than the others

thats because PIA is a Govt / Natl organization hence special treatment it gets unfortunately. Public interests i.e. PIA outweigh Private interests i.e. E4.

Aero Asia is waiting for the return of Defence Secretary to plead its case before him. The Defence Secretary is on leave up to May 30. Till then it appeared prepared to sustain the loss which, according to rough calculations, would be up to Rs 2 to 3 million per day. Aero Asia, according to aviation experts, is taking a 'blind risk' and not a 'calculated risk', because the Defence Secretary may or may not oblige it on the issue of payment, particularly at a time when SAI has made the payment to the satisfaction of CAA.

what a bunch of idiots...this is what you call "money growing on trees"

people wonder why Indian Aviation is so successful now.. govt. actually wants industry to succeed there..

true...but also remember the airports of kerala i.e. COK and TRV have not had AI-IC-9W-S2 give them payments for a long time as they too refuse to pay very high fees charged by the Kerala Airports compared to other Indian airports. These airlines collectively told them either u accept whatever we give u or we dont pay anything at all!!! Needless to say whatever the airlines thought was reasonable they paid!

at least airblue kicks PIA ass..

if ED and PIA were smart, they would have realized the gravity of the crisis facing E4 and Shaheen Air by domestic capacity being reduced as a result of the grounding of those 2 airlines. By this they should capitalize on the high demand for their flights during this period by increasing their fares by RS 1000-1500 at least for a round trip between KHI and LHE/ISB/PEW and vice versa thus providing them with extra income.

Aero Asia's stand is that since PIA is allowed a 45 days' credit facility, the same period be allowed to other private carriers as well, instead of the suggested 15 days' time period.

Even with 45 days credit allowed for PIA, they dont pay up on time the right amount. CAA should demand at least 30% payment of its total outstanding dues i.e. RS 0.9 billion immediately from PIA. If these airlines actually paid up on time their full owings then at least CAA would have quick cash avbl to fund the new ISB airport as well upgrade other airports in the country.

Btw...does Airblue pay up on time and in full?

[Abbas Ali]

Who is this Raji Air ?? Are these the likes of Pearl/Safe Air that still have to start?

Raji Air went out of business in 1994. The privately owned Pakistani airline flew domestic flights with a Tu-154M (registration LZ-MIR) leased from Air Via of Bulgaria.

[PK777]

Who is this Raji Air ?? Are these the likes of Pearl/Safe Air that still have to start?

Raji Air went out of business in 1994. The privately owned Pakistani airline flew domestic flights with a Tu-154M (registration LZ-MIR) leased from Air Via of Bulgaria.

Ah I see...

Thanks Abbas

[PK777]

PIA can do whatever the hell it wants, Aero Asia and Shaheen never defaulted until PIA stopped paying the CAA what it was owed creating unfair situation for the smaller private airlines

If CAA wants any respect as a legitimate organization they need to get up off their lazy asses, kick some PIA ass, and set rules in-place that are FAIR FOR EVERYONE not special treatment

Ok I see you point....but what has Aero Asia done in the past two/three years that they deserve to stay in the market ?

At least Shaheen Air has done a make -over on their services and tried to introduce a better image/livery. They paid what they owed and continued serving Pakistan passengers without question ( maybe the PAF played a part who knows ? ), but have shown changes in which they want to impove.

At least they did not lie about the B767 they were getting and using them on the Europe route they were given. CAA gave all the airlines of Pakistan flights to the UK/US what did the airlines do to make use of these privaleges...??

The next step for the CAA is to introduce lower landing and stop over fares if they want more airlines to stop over in Pakistan and improve the transit facilites for passengers to attract airlinesto stop over in Pakistan than in the Gulf....but with Dubai afew hours away is there any point ?

[qaume]

AA neverlied about the 767.. they got it but returned it b/c the CAA would not give them malaysia routes (which was the only market they could have served and turned a profit since the US/UK markets are so saturated thanks to Gulf and predatory pricing by PIA which is desperate to avoid competition)

Why do they deserve to stay in the market? They have done more than Shaheen which has ONE plane that doesn't even function part of the time (and most of the time they don't even fly domestic owing to special exemption).. The industry is going through a rough phase and Shaheen/AA since they aren't backed by deep American pockets or goverment cofferrs sufferred... Airblue is alive but bleeding money but it has a tax holiday for the next 5 years and have DEEEEEEEP pockets backing it up

American Airlines and Delta also suck, but they are providing their service.. Don't let your biases intervene.. The clear culprit here is the govt. interfering in private businesses, and PIA gundas as usual screwing up the industry

[PK777]

Well the CAA should lower their fees and put laws and regulations in Pakistan so airlines can operate fuel efficient aircraft and ban gas guzzlers e.g. Russian aircraft and the B737-200Adv..