$55m deal with US Exim Bank to 'power PIA into the future'
33
ISLAMABAD: United States Export-Import (Exim) Bank has agreed to provide $55 million funding to Pakistan for the refurbishment of Pakistan International Airlines' (PIA) Boeing aircraft engines by American company General Electric (GE).
The $55 million deal ─ Exim's largest financing activity in Pakistan since 2006 ─ will pay for the refurbishment of PIA's ageing Boeing 777 fleet by US conglomerate GE.
The deal is expected to enhance overall engine performance of the domestic carrier's Boeing aircraft.
The signing ceremony on Wednesday between GE and PIA was witnessed by US Ambassador Richard Olson, Federal Minister for Finance Ishaq Dar, Chairman of the Board of Investment Dr. Miftah Ismail, Special Assistant to the Prime Minister Captain Shujaat Azim, and Vice-Chairman GE John G. Rice, among others.
Ambassador Olson said, “Today, GE and its joint venture engines power more than 60 per cent of PIA’s aircraft, and this deal to refurbish many of those engines will power PIA well into the future," adding that such a partnership could go a long way towards connecting Pakistan with the rest of the world.
Read more: US appreciates Pakistan's sacrifices against terrorism
Prime Minister Nawaz Sharif had earlier said that PIA had been in very bad shape but efforts were being made to revive it.
He had hinted that the privatisation of 26 per cent share of PIA was the only solution to revive the PIA; however, he said the airline’s employees should not be worried as they would be taken care of.
Last year, PIA had received poor response from public relations and media management firms for its plan to improve its image by hiring a PR firm.
Hardly any reputed PR firm was interested in taking part in the bidding process, considering that PIA was a ‘dead product’ to sell, an official of a well-known PR company had told Dawn.
The management of my firm initially thought about participating in the bidding, but decided against it because it could not find enough positives about PIA, he said.
Read more
On DawnNews
Comments (33) Closed
May 20, 2015 07:04pm
I am sure this company would also install secret devices in our planes to monitor them afterwards....it sure is a setup
Recommend
0
May 20, 2015 07:30pm
This is why PIA will not be privatized........money can be borrowed under the guise such as ' power PIA into the future ' .......which will never happen as a matter of fact PIA will go further into debt.
Recommend
0
May 20, 2015 07:33pm
well done PTI, keeping then tinkering so they should work...
Recommend
0
May 20, 2015 07:47pm
Please allow foreign airlines a direct route and put PIA under pressure to compete.if PIA do not evolve let it die and save public money to be spent on education.
Recommend
0
May 20, 2015 07:59pm
@Dawn Staff, thats a 747. 777's are twin engined.
Recommend
0
May 20, 2015 08:07pm
Thats good news. PIA needs to have investment to make more money. They have done well to have survived threat of bankruptcy.
Recommend
0
May 20, 2015 08:21pm
Nothing will help as long as you have same corrupt and incompetent management and union. Sooner we get rid of PIA, better off we will be. Besides, most Pakistanis fly middle eastern airlines anyways, do we even need PIA?
Recommend
0
May 20, 2015 08:51pm
I have travelled once by pia.....years before it was good and a pleasent flight...
Recommend
0
May 20, 2015 08:56pm
PIA once helped establishing emirates now emirates now a global giant .... should buy new aircrafts ,reopen closed routes instead of refurbishing old ge engines ,
Recommend
0
May 20, 2015 09:16pm
Would it not have been better to invest this money in NEW aircraft such as the 787 or A380 instead of servicing an old fleet. The world is moving on, but Pakistan still has an obsession with trying to salvage its old fleet.
Recommend
0
May 20, 2015 09:25pm
A September 2014 news here at Dawn reported that a Gulf country is buying the core services of PIA, and PIA will be split in two. Yesterday, the Govt. announced an Emirates favourable aviation policy. Today we are buying new engines for our B-777s.
Has an inside deal been done and PIA sold? Some transparency please.
Recommend
0
May 20, 2015 09:27pm
@Parvez without engines the jets can't fly. I think they literally meant "power" in to the future.
Recommend
0
May 20, 2015 09:37pm
@abe . Yes. DAWN. Pl do verify the report. The 777 are the newer models efficient twin engine. Are you sure, the upgrade is for 777?
Recommend
0
May 20, 2015 09:44pm
@Warrior Bin Qasim, yes neighbor we need PIA.
Recommend
0
May 20, 2015 10:01pm
PIA is full of incompetent staff employed on political basis. This over staffed corporation cannot be improved if almost half of its staff are sent to other corporations.
Recommend
0
May 20, 2015 10:12pm
@sid It looks simple economics since you can't buy a single 787 for $55m. Secondly do you really need a Dreamliner and can justify the cost even if you have the option! Of course the assumption (a big one) is that they will spend $55m as they say, and will provide longevity to the dying planes.
Recommend
0
May 20, 2015 10:33pm
Not the $55 million deal only depoliticized PIA will see the future!
Recommend
0
May 20, 2015 10:38pm
@Ali Usman That is the stupidest thing I have heard, we certainly cannot build these parts domestically, so better to get these aircraft serviced and air-worthy rather than risk passenger lives.
Besides these are civilian planes that are constantly tracked with multiple transponders in line with IATA and ICAO protocols like all civilian passenger planes, so I would suggest firstly you get an understanding of how aviation works and second stop believing conspiracy theories
Recommend
0
May 20, 2015 10:39pm
@sid $55 million won't get you much in terms of new aircraft, the average price tag of every 777 that needs replacement is around 295 million dollars
Recommend
0
May 20, 2015 10:49pm
@sid
Exim is US and GE is US based firm and by taking this high cost loan we are forced to select GE i.e., all goes back to USA! Disgusting!!!
Recommend
0
May 20, 2015 10:59pm
Nothing is going to change in PIA with the current inefficient management..loan will add further burden and aid to sink faster...
Recommend
0
May 20, 2015 11:00pm
These planes are run on lucrative international routes generating millions of dollars in revenue. Why does PIA have to borrow to overhaul the engines? What about the original loans made to buy these planes? Are those loans paid back? PIA needs to realize that it is living on the back of the poor taxpayers of Pakistan who have to pay back every penny borrowed by PIA, and this can't go on for too long.
Recommend
0
May 20, 2015 11:11pm
PIA has very poor reputation in the world. Recently a survey was published as top 15 worst airlines in the world and PIA was in it too.
iIstead of paying millions to international PR firms, train PIA staff to be polite, clean the planes and on time arrival will fix some of its reputation.
Getting international firms won't do good to PIA but will help some executives to be better off. My 2 penny worth comments.
Recommend
0
May 20, 2015 11:28pm
@SID. $55 Millon does not buy you a 787 or A380. Those planes can sell for up to $290 Million. This is for refurbishment and improvement to the engines on existing aircraft. Although the 777 is relatively new I don't know why they're calling it "aging" here.
Recommend
0
May 21, 2015 01:26am
The moral of the story is, "How to destroy one of the finest airlines in the world".
Recommend
0
May 21, 2015 01:46am
PIA's ratio employee to aircraft is about 800 employees per plane, the highest in the world, Turkish Airlines one of the best airlines is around 190 employees per plane. Its the employees that make or break a company, and PIA employees absolutely and totally suck!!!!!
Recommend
0
May 21, 2015 01:51am
here we go, as i predicted its started bring the one of the most profitable airline down then sell it cheaply as no one wants it and someone will make millions
Recommend
0
May 21, 2015 02:14am
@Wajahat Hussain The planes are designed with specific options of the engines during the order time. These 747s - as in the picture or 777s as mentioned in the article could have been ordered initially with GE engines. So it is natural that GE would have to service them.
A predominant number of 777s fly with GE90 engines.
Recommend
0
May 21, 2015 02:17am
@Ali Usman And what would they hope to achieve by doing such a thing?
Recommend
0
May 21, 2015 02:30am
The only hope for PIA is for it to be treated as a business rather than a charity. There needs to be downsizing across the board and the money saved by doing that should be invested in newer, more fuel-efficient aircraft with amenities comparable to the international carriers. PIA also needs to make efforts to join one of the global air-alliances such as OneWorld so that it may have indirect access to the markets where it does not currently fly. There also needs to be a major overhaul of the outdated reservations systems by closing down the costly reservations offices and delegating the process to travel agents or online engines. PIA needs to study the international aviation industry closely and try to step into the 21st century, otherwise there is absolutely no hope for it in the world of stiff competition.
Recommend
0
May 21, 2015 03:16am
Pakistan would come out financially ahead even if PIA holds a yard sale to sell off all its planes and then shuts down. There are enough private, well run airlines to fill the gap and more.
Recommend
0
May 21, 2015 06:57am
NO amount of money can move PIA into the future. The customer service does not exist with this airline - Good luck in waisting all your money flying with this airline. One of my most negative flying experiences. Please use this money on education or health services that are badly needed in Pakistan.
Recommend
0
May 21, 2015 07:51am
Why not to lease or purchase the newer planes and return the older leased planes .
Is it wise to borrow more money & get overhauled on already borrowed older planes?
Recommend
0
