PIA borrows Rs10bn to expand fleet
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KARACHI: The Pakistan International Airlines has obtained a Rs10 billion loan from NIB Bank to facilitate its operational requirements, says a PIA statement on Friday.
A ceremony for signing the term finance facility was held at the PIA head office and attended by airline chairman Nasser N.S. Jaffer, managing director Shahnawaz Rehman and Atif R. Bokhari, president and CEO of the bank. According to the agreement, the loan will be repaid in five years.
Giving a briefing on the PIA’s aircraft acquisition programme, the managing director said that nine A320 aircraft and five ATR72 aircraft had already joined the PIA fleet while another four A320s would be added soon.
Also read: PIA liabilities touch Rs288bn; paying Rs3.2bn in debt-servicing
He said acquisition of three B777 wide-bodied aircraft to replace old B747s was also in process.
In reply to a question about the interest rate, PIA spokesperson Aamir Memon said that details of the financial transaction between the bank and the PIA could not be disclosed.
Published in Dawn, July 25th, 2015
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Comments (28) Closed
Jul 25, 2015 07:24am
better service is needed instead of bigger fleet
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Jul 25, 2015 07:25am
The details should be made public, for transparency and accountability.
The phrase "quality over quantity" needs to apply to PIA. Maybe replaces the planes they already have; work on their customer support; hire new air hostesses.
There was a time when PIA was one of the top notch airlines in the world. Now, sadly, it's a dump. And I can bet they won't pay this 10bn off. Instead, pay some off it, while offering free tickets to high-executives of the NIB later on when the due date nears.
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Jul 25, 2015 07:33am
Why this big amount? Oh. Out of this US$ 97 million, Europe, America and other countries will first deduct their penalties and fines.
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Jul 25, 2015 07:34am
They are borrowing money for more fleet but yet they own millions in airport fees and fines. Mostly importantly they are a money losing company why invest in something that doesn't make 1 cent?
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Jul 25, 2015 07:43am
Won't do any good. Employee to aircraft ratio is too high. PIA needs to let go at least half of its labor force. This is the only way it can be profitable. Besides more than half of the employees are just there because of favoritism and nepotism.
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Jul 25, 2015 08:10am
Faida? All the new aircrafts will be ruined. Change the management and fire at least 70% of the workforce. Do not need too many parchies...
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Jul 25, 2015 08:19am
Another Rs. 10,000,000,000 down the drain.
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Jul 25, 2015 08:48am
They are not paying anything to CAA. No one can exert pressure on PIA. At least one DG CAA was sent home on taking hard line for recovery of CAA dues. CAA dues are now around Rs. 22 billion.
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Jul 25, 2015 09:11am
Useless exercise,all these loans will be eaten up by corrupt mafia in PIA and taxpayer will bear all the burden, PIA needs to be immediately privatised.
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Jul 25, 2015 09:52am
If you look at PIA counters at international airports one or two will be working in slow pace while three or more will be Stanford behind enjoying conversation.
You need to trim down the workforce hired under various political processes and bring in new blood. Perhaps than they may be able to swim out the mess they are in.
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Jul 25, 2015 10:02am
Lack of intelligent comments; all pointing towards complete privatization of PIA. However, they do not realize the repercussions of such an idea in a country like Pakistan.
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Jul 25, 2015 10:11am
More loans. More aircrafts. More kick backs. Same story repeated for decades.
As far as PIA is concerned, the governance has been very poor. PML-N government has not only ruined PIA but also aviation industry by promoting open sky policy.
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Jul 25, 2015 10:27am
Bring in a foreign CEO from west and let him clean up PIA from nepotism and better the operations. Same formula used by Emirates, Al Etihad and Qatar Airways. See where they are, winning awards.
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Jul 25, 2015 10:33am
All big banks havent participated... seems like NIB wants to keep up its streak of losing billions every year...
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Jul 25, 2015 10:34am
Who in their right mind lend billions to a money loosing enterprise, and inefficient as PIA, is mind boggling! Makes no business sense.
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Jul 25, 2015 10:45am
Another 10 billion to be shared among corrupt and incompetent PIA officials and the equally corrupt and illiterate politicians who appointed them. And in the end the same politicians will write off he loan. A win win situation for corruption but continued misery for the nation.
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Jul 25, 2015 10:49am
PIA needs absolute cleansing of dead wood or those termites would eat away this huge amount & another loan default
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Jul 25, 2015 10:51am
lower your staff, make sure your flights are not late save money, provide good food. higher good people with good atitude get rid shfarshi business will increae
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Jul 25, 2015 11:28am
@Mr. K , could you please enlighten us?
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Jul 25, 2015 11:58am
Seems like NIB will be showing a NPL of 10,000,000,000 on its books very soon!
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Jul 25, 2015 11:58am
Unless PIA is allowed to run with full independence, without all type of political interference & pressure there is no chance of reverting to the golden days of PIA of the olden years. What was PIA once & what is PIA now, courtesy extreme interference & corruption. Out of 10 billions, guess what ?
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Jul 25, 2015 01:03pm
Only professionalism and commercialism will survive in this competitive world.PIA will be out of business sooner or later leaving huge liabilities to be borne by this nation.world.
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Jul 25, 2015 02:32pm
@Mr. K Ok than you enlighten us all on this privatization of PIA issue. I am waiting.
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Jul 25, 2015 02:52pm
Very big mistake. Even all this money will go in corruption & mishandling. last year or two years back, PIA had rented plane engine from outside country & didn't release the engine from Karachi customs.
Hence, PIA was just paying rent for the engine & not releasing the engine from customs, by keeping the PIA plane also on ground, costing PIA millions on daily basis.
THIS IS HOW PIA management runs the airline company. PIA is DOOMED !!!!!
PIA belongs to ALL PAKISTANIS & we all should force the country for its better future.
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Jul 25, 2015 02:55pm
@Desi firing the labor force wont do any good. Its government company, so they will still have to pay them pensions etc etc etc.
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Jul 25, 2015 04:02pm
@Zak : Make a qualified person from Pakistan , CEO of PIA, I am sure they will prove to be more patriotic and will make PIA a profit making organization.
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Jul 25, 2015 04:19pm
another Greece in making
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Jul 25, 2015 07:56pm
Apropos to loan taken by PIA, will be proved to be wastage soon. Chairman Mr Nasser N.S. Jaffer is honest person but un familiar and inexperience to aviation industry. All the powers regarding fleet procurement of PIA are lies with Mr Shujat Azim. Recently, PIA hired A320 aircraft on lease from china but due to kick backs faulty aircraft hired and most of cabin comfort facilities for passengers are unserviceable. Couple of days ago, I personally travelled through PIA from KHI to ISB, no tea / coffee was served to customers on board, staff had informed that since long tea making equipments are not working on some A320 aircrafts. Moreover, ATR-72 hired by PIA are totally not feasible due to its weight balancing. Passengers boarding is made in piecemeal to maintain aircraft balance. Corruption at gross root level is on higher side whereas no accountability process so far yet started by PIA management due to Government/political parties influence.
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