SriLankan Airlines fails in new bid to lease aircraft to PIA
SriLankan Airlines lost a fresh bid this week to win a Pakistan Airlines (PIA) A 330 aircraft wet lease tender following the end of its 6-month commercial contract of the first aircraft lease in a three-A 330-deal inked in August last year.
These developments had followed tough negotiations by the top brass of the national carrier over the past few weeks with their PIA counterparts who repeatedly requested for a discount on the original lease rental of the single A330 aircraft.
The PIA had also delayed the payment of lease rental in the August 2016 A 300 aircraft wet lease deal, an agreement termed ‘highly successful’ by SriLankan Airlines CEO Suren Ratwatte in a media release on Thursday. Earlier Capt. Ratwatte had attributed a delay in payment due those authorities being pre-occupied with a PIA plane crash on a domestic flight on December 7 and, bank holidays in the US over Christmas.
Earlier this week on Monday, just as the SriLankan Airlines wet lease arrangement with PIA was due to end on Friday, February 10, the PIA called for bids to wet lease A330 aircraft. In the earlier arrangement with SriLankan Airlines no bids had been called or a tender announced.
Three international airlines, Turkish Airlines, Sri Lankan Airlines and Hi Fly submitted bids for the new A-330 craft wet lease tender and the tender was awarded to Turkish Airlines, according to authoritative Pakistani aviation industry sources.
At the evaluation of the bids Hi Fly’s bid was rejected due to non availability of the desired aircraft, while Turkish Airlines received 32.8 points for its technical capability and 60 points for financial position. The only other competitor, SriLankan Airlines secured 36.4 points for its technical capability and 53.8 points of its financial position, the sources added.
Thus Turkish Airlines with 92.8 points won the tender outwitting SriLankan Airlines which received 90.2 points during the evaluation process.
The Turkish Airlines wet lease charge was around US$ 6000 per hour, much lower than the rate of $8100 per hour PIA paid for the earlier SriLankan Airlines plane. Though PIA has an option of taking two more aircraft under the earlier deal in addition to extending the lease after the first six months the airline appears to have opted to exit from all those options owing to the cost.
There had been intense negotiations last month between SriLankan Airlines and PIA which requested a discount on the agreed price of $8100, as it was higher than the industry market average of $6000. The discussions which included a request from PIA to offer the second and third aircraft at the market average hire rate, ended inconclusively.
The sources said that a Turkish Airlines A330 plane will be in Pakistan within the next two weeks while the SriLankan Airlines plane would be returned to rejoin the local fleet.
In August last year, PIA agreed to acquire three Airbus A330 aircraft from Sri Lankan Airlines on a wet lease – which includes use of the crew. CEO Ratwatte went on record stating that “PIA has agreed to take over the second A330 Aircraft on February 10, in accordance with lease agreement. The third aircraft will be taken over in March or April, subject to crew availability.” The first aircraft acquired by them was used for the Islamabad-London ‘Premier Service’, since its inauguration by Prime Minister Nawaz Sharif on August 14 in 2016.
In a statement on Thursday, Captain Ratwatte said: “This contract was the most profitable commercial agreement undertaken by SriLankan in the recent past. It has helped to uplift the bottom line of the company at a time when we are facing significant challenges in our efforts to transform the financial fortunes of our airline and return it to profitability.”
In what was most probably the last flight under the PIA banner, the SriLankan Airlines-owned A330 on February 7 was intercepted by RAF typhoon fighters while flying to London and forced to land at Stansted Airport. A Pakistani man wanted by the UK Metropolitan Police was reported to have been escorted off the aircraft after it landed, media reports revealed.
Meanwhile the Federal Investigation Agency (FIA) in Lahore is carrying out an investigation into the PIA A330 aircraft deal with SriLankan Airlines, Pakistani media reports revealed.
The inquiry against the PIA management into charges of corruption was launched as there were allegations of taking massive commissions from the deal, media reports said.