Pakistan's PIA close to settling A320 lease dispute
PIA - Pakistan International Airlines (PK, Islamabad International) is in the final stages of settling its long-running dispute with Asia Aviation Capital Limited (AACL) concerning two A320-200s stuck at Jakarta Soekarno-Hatta. AACL, a wholly-owned subsidiary of Capital A, was claiming USD31 million from PIA. However, the two parties have reportedly agreed on a USD26 million payment.
The parties are close to formally resolving the dispute following a series of meetings in Kuala Lumpur, with a PIA spokesman telling ch-aviation that resolution of the matter was imminent. In the background, the lessor had initiated a case in the UK High Court - Asia Aviation Capital Limited v. Pakistan International Airlines Corporation Limited (case no: CL-2023-000543).
The matter centred on AP-BLY (msn 2926) and AP-BLZ (msn 2944) leased from AACL in 2015 at a per aircraft rate of USD265,000 per calendar month, plus the standard supplementary leasing costs. In 2019, with PIA in arrears, AACL started legal action in the UK, with the court later finding in favour of the lessor. In 2021, AACL ordered the aircraft be ferried to Jakarta for maintenance at the FL Technics Indonesia facility, where they have remained ever since. AACL's legal representatives declined to comment to ch-aviation.
AACL's current claim against PIA for USD31,343,641 alleges the airline failed to return the two aircraft at their lease end date and is claiming unpaid basic rent, redelivery rent, maintenance reserves, and contractual interest. Earlier efforts by PIA to resolve the matter have failed, but last month, ch-aviation reported that a delegation of PIA and Pakistani government officials were heading to Malaysia for talks. Reportedly, PIA's legal representative, Norton Rose Fulbright, advised the airline that their chances of winning the current UK court matter were slight and that they should attempt to mediate a solution.
The soon to be signed agreement will see PIA pay approximately USD26 million. In return, AACL will transfer the titles of the two planes to PIA in two instalments. The Pakistan government's Economic Coordination Committee (ECC) approved bridging finance of PKR8 billion rupees (USD28.9 million) on October 29 to cover the payments.
