Monday, January 16, 2012

Pakistan International Airlines contemplating purchase of new aircraft

The Pakistan International Airlines is contemplating replacement of 13 old, but workable, aircraft with the same number of new aircraft to be purchased to enable the management add new routes and destinations.

Reliable sources said that at a time when the national carrier is faced with a crunch, the move seems incomprehensible.

It would not be a profitable scheme, they added.

According to information available here, PIA management has decided to purchase 13 new airplanes, on lease, to improve the "efficiency" of the national carrier at a time when it faces shortage of funds even for repairing its existing aircraft for routine services.

On the one hand ,the airline management trumpets that, with new fleet, it would introduce service to new destinations and further enhance frequency to popular routes to increase revenue, while on the other hand it plans to remove some existing aircraft which could be made serviceable.

The PIA at present has 39 aircraft of different models being operated on various international and domestic routes everyday but the management is interested to buy 13 new airplanes in coming months.

Sources believe that there would be a window of opportunity to earn kickbacks from the sale of old aircraft and new purchases, which would bring gifts for people at the helm of affairs.

Expressing concern over transparency on the sale and purchase of aircraft, sources demanded that the government should monitor PIA management's financial and business plans for averting possible scam.

Not only the plan to acquire new aircraft, and replace them with operational aircraft, seems highly dubious in terms of financial dealings.

It is also technically inappropriate as far as flight operations are concerned.

New airplanes would be available after several months' gap, as training of crew members, including pilots and engineers, would be required.

Official sources said that since training of staff is mandatory with the arrival of new airplanes, there would be likely suspension of various flights, resulting in loss of revenue and further bringing the management under pressure.

The existing aircraft are all repairable, with fewer expenses, if proper maintenance is ensured and timely spare parts are made available.

It is a myth, they said, that old aircraft such as B 747 is a fuel-guzzler and costs heavily in flight operations.

On the contrary, as per PIA's calculation, Boeing 747, having 468 seats, cost per hour is Rs 1.72 million while Boeing 777-340 ER, a relatively newer aircraft with capacity of 393 passengers, costs Rs 1.8 million per hour as per average estimate, while smaller series of Boeing 777 consumes around Rs 1.4 million per hour average.

Similarly, B737 has capacity of 118 passengers and its operation cost per hour is Rs 0.473 million; ATR42 has 48 seats and its flying cost is Rs 162 million; and A310L has capacity of 205 passengers with per hour cost of Rs 0.867 million.

This calculation proves that the difference between the aircraft expense and revenues is not as significant as, on the other hand, there is no harm in operating older aircraft for particular endowment, such as Boeing 747 and 737, particularly for domestic, Umrah and Hajj flights.

It would be more prudent if the management enhanced the fleet with purchase of new smaller aircraft to make its domestic operations cost-effective and use bigger aircraft on longer and traffic-oriented routes.

This way, the airline would be able to operate flights properly, and timely, to maximum number of destinations and earn handsome revenues to pay back cost of new aircraft.

Sources in PIA said that airline management should also refrain, at least for the time being, from promoting projects which affect the budge badly, such as FM radio and poor fashion shows., etc, till it gains strength and becomes a profitable venture.


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