Mar 05, 2017

PIA suspends Turkish Airlines deal till probe is held on SriLankan deal

The Pakistan Federal Investigation Agency has instructed the Pakistan International Airlines (PIA) to suspend the Turkish Airlines A330 operation until a full investigation is carried out into the allegation of corruption in to the Sri Lankan A330 aircraft deal.

Much boosted Sri Lankan Airlines three A 330 Aircraft wet lease deal with PIA signed in August last year came to an abrupt end on February 10, following PIA’s action to terminate the agreement after six months and send back the A-330 aircraft taken by them.

In the meantime the PIA has called international bids to acquire A-330 aircraft on wet lease and selected Turkish Airlines to award the tender rejecting the Sri Lankan Airlines bid which was forced to bid for the tender as it has no other option.

“Sri Lankan” has lost the tender during the final evaluation, PIA aviation officials said. They pointed out that the Federal Investigation Agency is now conducting probe into the “Sri Lankan Airlines” deal alleged by Pakistani officials for corrupt practices.

“There was no agreement ever for the lease of the 2nd and 3rd aircraft from Sri Lankan Airlines and it was only a discussion but never a signed document as the CEO Suren Ratwatte made a public statement to a weekend newspaper claiming that the 2nd aircraft will go to PIA in February and the 3rd some where in March or April, an official said.

PIA Boeing 777-200ER registration AP-BHX is now flying 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, the official said.

Million dollar question is as to why PIA continues to wet lease A330s for Premier Service/. A while ago news were circulating that PIA's crew getting upgraded on A330s and PIA will be operating dry leased Aircraft for this service.

PIA after incurring stark operational losses of over Rs 3 billion for running its Premier Service to London during the last six months looked up to Turkish Airlines (THY) to acquire A-330 aircraft on wet lease but now at industry average rental fee, reported a Pakistani national daily.

Sources said that national flag carrier had earlier acquired A-330 aircraft from Sri Lankan Airlines (SLA) on wet lease at US$8100 per hour rent for guaranteed hours for its Premier Service to London.

The aircraft from SLA was engaged for six months under a formal agreement at a rate that was 25 percent higher than the market rate.

The decision to acquire aircraft from SLA by paying an additional US$ 2100 per hour rent signalled a poor management decision, which the sources described as one of the major reasons for incurring a colossal operating loss of over Rs. 3 billion during six months of Premier Service operations.

Turkish Airlines is leasing out similar aircraft to PIA at US $6000 per hour for guaranteed hours- a 25% reduction in rental fee.