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PIA to purchase five Boeing 777 aircraft: Defence Minister

September 12, 2012


Defence Minister Naveed Qamar.—File Photo

ISLAMABAD: Minister for Defence Syed Naveed Qamar informed members of the parliament’s lower house on Wednesday that since March, 2008, Pakistan International Airlines (PIA) had signed only one agreement for purchase of five Boeing 777- 300ER aircraft to meet its growing needs and the aircraft would be delivered to Pakistan in the year 2015.

In a written reply, the minister stated that on February 14, the approval for the contract was accorded by a meeting of the PIA Board of Directors on Dec 26 last year.

Responding to another query, the minister said the primary reason for the delay of flights was shortage of aircraft. Presently, he added, PIA was operating on 38 International and 24 domestic routes with a fleet of 38 aircraft.

He said that steps have been taken by the newly appointed Chairman PIA to ensure on time arrival and departure of flights and the government was planning to induct some aircraft, on dry lease, to meet its immediate operational requirements.

“Departments within the organization have been reduced to seven from fourteen for better management and coordination. Maintenance, repair and overhaul (MRO) facilities have been improved,” he added.

The minister stated that an engineering team headed by a quality control engineering expert of boroscopic inspection has been placed at Lahore. Owing to these steps, he added, punctuality has been increased to 78.1 per cent in the month of July, 2012 as compared to 69.6 per cent in June, 2012.

He confirmed that PIA has signed an agreement with M/s Transworld Aviation FZE Dubai for investment, consultancy in procurement of all aircraft parts/spares, GSE, repair management and sales of surplus inventory.

“It is reiterated that PIA Board of Directors in its 334 meeting held on 24th September 2011 approved to sign the agreement with M/s Transworld Aviation FZE Dubai. Draft agreement was reviewed by PIA legal team and its consultant”.

He said that it is a fact that first right of refusal for matching the lowest price would rest with M/s TWA Dubai being the special and unique supply cabin concept in Aviation logistics, however, it is being negotiated and will be amended accordingly.

“Pursuant to international practice for termination of agreement, 90 days prior notice by either party (bilateral termination) has been incorporated in the agreement,” he added.

Narrating salient features and benefits of the agreement, Qamar said this would bring in a unique concept of supply chain in commercial aviation.

“90 days credit for the supply of aircraft spares worth $ 40m/annum would be ensured while 90 days deferred credit facility up to $ 700m/annum for spare, repair & inventory sales management would be availed. Moreover, supply of all aircraft parts, consumable and high cost, life limited parts has been ensured”.

He said the repair/overhaul of rotables/sale of surplus inventory & management would be made while PIA will define/provide annual requirement of spares in advance.

The minister added a credit line of US$ 700 Million to support the PIA operation would be made while 90 days rolling credit for all supplied parts, components, services, etc. would be ensured.