PIA resolves dispute over parking fees for stranded aircrafts

• Financial constraints, lessor’s non-responsiveness, and Covid related travel restrictions caused delay in re-delivery; officials absolved of negligence

WEB DESK: The Ministry of Aviation has submitted a report to the Senate of Pakistan detailing the fees and details of the cost of title transfer of two aircrafts.

The report says that the Pakistan International Airlines (PIA) has successfully resolved a contentious issue involving parking fees for two of its aircraft, paving the way for their inclusion in the airline’s fleet.

From September 2021 to December 5, 2023, approximately Rs 9 billion in parking fees was demanded for two A320 aircrafts, MSN 2926 and 2944, parked at Jakarta Air Base in Indonesia.

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These aircrafts were acquired from Asia Aviation Capital Limited (AACL), affiliated with Air Asia Airlines, on dry lease in September and October 2015 for a period of six years.

According to the Ministry of Aviation’s report, the aircraft were required to be positioned at an EASA or FAA-approved maintenance facility in Jakarta, Indonesia, as per the lease agreement. However, due to financial constraints faced by PIA, unresponsiveness from the lessor (AACL), and COVID-19 travel restrictions, the aircraft remained stranded at the Jakarta Airport for an extended period.

The AACL later notified PIA of total rent arrears amounting to $31.3 million and subsequently issued a court notice demanding outstanding dues. Through extensive negotiations, PIA managed to secure the title transfer of both aircraft by paying $26 million towards outstanding dues, including the cost of the aircraft, against a claim of $32 million.

The aircraft, bearing registration numbers AP-BLY and AP-BLZ, arrived in Pakistan on December 5, 2023, and February 8, 2024, respectively, and have now been incorporated into PIA’s fleet.

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It’s noteworthy that PIA did not incur additional charges for parking the aircraft in Jakarta as they were parked at the facility of an MRO (Maintenance, Repair, and Overhaul) organisation.

Technicians responsible for maintenance cited PIA’s financial constraints, non-responsiveness from the lessor, and travel restrictions due to the COVID-19 pandemic as reasons for the delay in re-delivery, absolving officials of any negligence.