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Saturday, 30 July 2016 00:01 - - {{hitsCtrl.values.hits}}
Pakistan International Airlines (PIA) has formalised wet leasing of three A330 aircraft from Sri Lankan Airlines.
At a ceremony held in Colombo on Friday, CEO Bernd Hildenbrand signed the contract with SriLankan Airlines Chairman Ajith Dias and CEO Capt. Suren Ratwatte.
The contract has materialised after a series of negotiations between the two sides. First of these aircraft would be delivered during the next week while the rest will be delivered in the following months, Pakistan newspaper The News reported.
These aircraft are in brand new condition and will be used for PIA Premier, giving passengers a better experience, allowing PIA to start regaining its market share. PIA Premier is scheduled to be launched on 14 August initially only to London.
There will be six weekly Premier service flights to London including three from Islamabad and three from Lahore. Later with the addition of more aircraft the service will be expanded to other destinations. Chairman Azam Saigol appreciated the efforts of the PIA team led by Hildenbrand in finalising this contract.
The SriLankan aircraft currently flying to Paris, Rome and Frankfurt will be diverted to PIA, Public Enterprise Reform Minister Kabir Hashim told reporters last week.
The first aircraft is to be handed over in August on a wet lease. Last month SriLankan announced it would be pulling out of the Frankfurt and Paris routes by October while Rome was dropped in February.
Hashim insisted the step was taken because the European routes have “low yields” and expressed confidence the tourism industry would continue its robust growth without direct flights from these destinations.
The duo insisted the airline would concentrate its resources on increasing regional flights that are shorter and have more passengers and higher profit margins.
SriLankan is losing the price war waged by the well-heeled Middle Eastern airlines that combine strong marketing campaigns with good service to attract customers, the Minister stressed. However, SriLankan cannot afford to let its aircraft flying to Rome, Paris and Frankfurt sit unused, resulting in the agreement with PIA.
“Currently operational losses of SriLankan is $ 993 million but with liabilities it increases to $ 2.1 billion, making it a hard sell. Just this week the Treasury released $ 88 million for debt payments. At the moment the Government has given the option of absorbing this loss if an international partner can be found but it all depends on the negotiations. At the moment no formal application has been made by any carrier,” Minister Hashim said.
