Pakistan International Airlines (PIA) is incurring expenses of approximately $600,000 per month for the two A320s that have been parked at the Jakarta Airport for the past nine months. Both aircraft have remained unused, costing over $295,000 each per month.
PIA has sustained losses in the millions of dollars due to delays in the redelivery process of the planes. This ensued after the company which leased the planes to PIA blamed the national airline for replacing parts and failing to conduct an essential ‘C Check’ prior to returning the jets.
“We acknowledge the delays in the redelivery of the planes, and we are taking steps to rectify the situation,” said a PIA spokesperson. “We are working within the constraints of the COVID-19 pandemic and we are also facing a lawsuit that has resulted in delays. We are committed to resolving this issue as soon as possible.”
PIA employees have come under criticism for taking multiple government-funded trips to Jakarta, but the airline has explained that the supervisors needed to look after the planes while they were grounded under a third-party contractor.
PIA is one of the biggest loss-making state-owned enterprises. The annual loss of PIA in the fiscal year 2021 amounted to Rs. 50 billion and in 2020 it was recorded at a whopping Rs. 34.6 billion. The total loss of PIA ranges between Rs. 400-500 billion.
The Background
PIA acquired two A320s on lease in 2015 for a period of six years. The monthly rent of $550,000 included the rent for the planes, maintenance costs, and insurance. It is a common practice by airlines worldwide to pay a hefty amount of rent for leased planes.
It has been nine months since the expiration of the deal with FL Technic, a third-party company contracted for aeroplane inspection due to COVID-19 restrictions. The planes were flown to Jakarta for the inspection and it was determined that repairs were needed. To date, the planes have not been repaired.
“This entire fiasco is bleeding PIA dry right now. We are paying half a million dollars a month for planes we are not even using. And that too at such a critical time. On top of this PIA employees are going around to Jakarta on junkets with their families in tow. It is criminal,” said a source quoted by the Profit.
