Pakistan shamed: National carrier PIA loses top-end aircraft due to unpaid dues

In a huge embarrassment for Pakistan, an aircraft of its national carrier Pakistan International Airlines (PIA) was seized due to non-payment of dues. 

The case involves a $14 million lease dispute, the airline admitted in a statement, adding that alternative arrangements were made for the passengers who were due to fly on the seized aircraft from Kuala Lumpur to Islamabad. 

The Boeing 777-200ER aircraft was seized after a court order in Malaysia, an airline spokesman said, and alternative arrangements were being made for passengers due to fly back to Pakistan. 

“A PIA aircraft has been held back by a local court in Malaysia taking a one-sided decision pertaining to a legal dispute between PIA and another party pending in a UK court,” PIA spokesman Abdullah H Khan said.

Also read: Aviation deaths increase in 2020 even as fatal incidents, flights fall

“We were told that the plane has been impounded on a court order. PIA’s legal team will pursue it in the Malaysian court, and we hope we will resolve this issue as soon as possible,” he added.

Slamming the PIA for its "irresponsible attitude and maladministration", the Pakistan Civil Aviation Authority (PCAA) said that the PIA seemed to be "unaware of international civil aviation leasing laws", according to a Geo News report.

"When PIA knew that the Boeing 777 was involved in a court case, why did it allow the aircraft to fly abroad?" the CAA asked. "Was not PIA aware of the fact that violating international civil aviation laws will embarrass the country?" it added.

The PIA's B777 fleet currently comprises six B777-200ERs, two of which are leased; four B777-300ERs, one of which is leased; and two owned B777-200LRs, according to Ch-aviation. Both the leased B777-200ERs had come from Irish lessor Peregrine Aviation, and the plaintiff, in this case, is Peregrine Aviation Charlie Limited.

Also read -- Boeing's B737 Max: Tragic hero for some, untouchable for others

The two B777-200ERs were initially leased to the PIA in 2015 by leasing giant AerCap but were later part of a portfolio of 21 planes worth $800 million that the AerCap sold to Peregrine in 2018. AerCap holds a 9.5% stake in Peregrine Aviation, according to the US Securities and Exchange Commission. 

The Malaysian court had directed that whenever either of the two leased PIA B777-200ERs landed in Kuala Lumpur, the carrier would be restrained from moving it until a hearing took place. According to the Malaysian transport ministry, legal proceedings have now been fixed for January 24. 

The impounded B777-200ER, carrying a registration code of AP-BMH, had landed in Kuala Lumpur on January 15, according to Flightradar data cited by Ch-aviation. The other plane, carrying the registration code of AP-BMG, had been in Karachi since December 20.

The PIA, which reportedly shoulders more than $4 billion in accumulated losses and is currently banned from flying to the European Union (EU) countries, said the situation was “unacceptable” and confirmed it had asked Pakistan’s government for support in resolving the matter.

(Cover image courtesy: Wikimedia Commons/Sidowpknbkhihj)