PIA concerned about potential aircraft seizure and asset attachment
abroad
Amid its ongoing financial crisis, Pakistan International
Airlines (PIA) finds itself embroiled in a dispute totaling $31 million,
encompassing outstanding rent, re-delivery rent, maintenance reserve, and
interest charges for two aircraft. PIA is expressing apprehension about the
potential seizure of its properties overseas and the attachment of its
aircraft.
Sources reveal that Pakistan International Airlines
Corporation Limited (PIACL) has been served a court notice by Asia Aviation
Capital Limited, with its UK-based legal representation, Herbert Smith
Freehills, demanding immediate payment of $31.3 million for the aforementioned
outstanding amounts. PIACL has acknowledged the court notice and, acting on its
instructions, PIACL's UK-based legal counsel, Norton Rose & Fullbright, has
sought time from the High Court of Justice, England and Wales, London, to
respond to AACL's claims.
Two
PIA aircraft stranded in Jakarta for two years
Legal experts have assessed PIACL's position as precarious
in this matter, and they recommend that PIACL explore an out-of-court
resolution with AACL, not only regarding the claimed sums but also concerning
future liabilities related to rental payments and aircraft re-delivery.
Sources indicate that a negotiation team led by the
Secretary of Aviation engaged in talks with AACL to seek an out-of-court
settlement in the best interests of the company. Their aim was to persuade AACL
to agree to a consolidated amount of $26 million, which included the transfer
of the title of the two aircraft in two installments.
In 2015, PIACL acquired two A320 aircraft, AP-BLY (MSN 2926)
and AP-BLZ (MSN 2944), on a six-year lease from Asia Aviation Capital Limited
(AACL). Per the lease agreement, the aircraft were to be redelivered after
necessary maintenance at a certified maintenance and repair facility (MRO) upon
the lease's expiration. However, this timeline was not adhered to, leading to
disputes between AACL and PIACL regarding responsibility for the delay, the
actual lease rent amount, and associated penalties and interest. This dispute
had previously resulted in litigation in 2019 and 2021, requiring PIACL to pay
$12.058 million to AACL.
PIA
send delegation to Jakarta to resolve Airbus A320 aircraft dispute
It's worth noting that the Economic Coordination Committee
(ECC) of the Cabinet had previously considered a Ministry of Aviation summary
concerning "Financial Support to PIACL for settlement of outstanding dues
to M/s AACL with Transfer of title of two A320 Aircraft AP-BLY, AP-BLZ."
However, the ECC did not approve the proposal. Instead, the ECC tentatively
agreed to provide bridge financing of PKR 8.0 million between PIACL and the
Pakistan Civil Aviation Authority to facilitate the settlement and transfer of
the titles of the two A-320 Aircraft, AP-BLY and AP-BLZ, and to meet immediate
working capital needs.
Furthermore, the ECC instructed the Ministry of Aviation to
independently handle the settlement agreement with AACL, as it falls outside
the ECC's purview.
Source: Profit Pakistan