Malaysia releases PIA’s aircraft grounded over lease dispute

KARACHI: Malaysian authorities on Wednesday ordered the release of the Pakistan International Airlines’ (PIA) plane which was grounded in Malaysia over a lease dispute.

A PIA spokesman said the aircraft has been released after successful talks with the leasing company.

“The aircraft will return on 29 January as a regular flight from Kuala Lumpur,” the spokesman said in a statement.

Malaysian authorities seized the PIA Boeing 777 aircraft on January 15 after the local court accepted the plea of the plane’s lessor Peregrine Aviation Charlie to ground it until a $14 million lease dispute in a UK court is settled.

“The case in Malaysian court has also been dismissed. The aircraft Boeing 777 will now fly back to Pakistan carrying passengers on its regular flight PK 895 from Kuala Lumpur on 29 January,” said the spokesman.

The spokesman further said all necessary arrangements are made including deployment of crew which has already been sent for return of the aircraft.

The Kuala Lumpur High Court ordered the immediate release of the plane after both sides said they had reached an amicable settlement to the dispute, involving two planes leased to PIA, Reuters reported a lawyer representing the airline.

“Peregrine has agreed to withdraw its suit against PIAC (Pakistan International Airlines Corp) and for the injunction orders to be set aside,” said PIA counsel Kwan Will Sen. “With this, the two Boeing aircraft operated by PIAC would be released with immediate effect.”

The lease conflict added to troubles of state-owned airline going under the organizational restructuring plan with its losses swelled to more than Rs400 billion since 2008. Under the law, the management control of the PIA continues to remain in the hands of the federal government and majority shares could not be transferred to any private party.

In December last, PIA announced a voluntary separation scheme (VSS) to shed half of its employees and set aside Rs12.69 billion for VSS, the PIA’s spokesman said then. Before the VSS, PIA had around 13,000 employees.

The airline sees attrition of 1,000 employees every year. The airline incurred over Rs56 billion losses alone in 2019 and that was continuation of its subpar performance for over a decade.

PIA also planned to set up base maintenance in Islamabad. Line maintenance is already carried in the capital city, saving its costs of the aircraft shift to Karachi after every four flights. Since engineering is capital-intensive, its complete relocation depends on when and how Rs6 to 7 billion are raised.