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BY OUR AVIATION CORRESPONDENT
4 August, 2005: Airblue, a new entrant into the fledging Pakistani airline industry, is in negotiations with European giant Airbus Industrie for the procurement of 10 aircraft for $1.25 million. If the deal goes through, this would be the biggest civil aviation contract in the history of the country.
The deal with Airbus Industrie, which includes acquiring a A-320 and A-330 aircraft, is expected to be finalised next week in the presence of Pakistani Prime Minister Shaukat Aziz.
This would also be the biggest foreign investment in a single installment. The acquisition is thanks to the new aviation policy of the government, which has permitted the nation’s carriers to fly to international destinations among others.
The national flag carrier Pakistan International Airlines (PIA) inked a deal with Boeing for eight 777 planes in 2002, with a total outlay of $2 billion.
Although the Airblue deal does not match with that of PIA in value terms, in terms of number of aircraft, this is a bigger deal.
On a comparative basis, the Pakistan International Airlines (PIA) is spending $2 million over the next 10 years on purchasing 11 Boeing 777 aircraft to replace older aircraft and to augment its fleet.
Airblue currently operates three airbus A-320s on dry lease, which would be replaced with the new aircraft, even as the carrier plans to expand its domestic operations and fly to foreign destinations.
The cash-rich airline would be financing the deal through its internal accruals and without a government guarantee. On the contrary, PIA has to mortgage its entire fleet, apart from furnishing a government guarantee to get funding from US Exim Bank.
Airblue has registered its entire fleet in Pakistan and hired aircraft on dry lease while other airlines hired aircraft on wet lease.
A new aviation policy allows the private airlines to operate on international routes, and the carrier is expected to make use of this clause by commencing global operations. According to industry sources, this would be the second phase of development and the carrier would place more orders.
BY OUR AVIATION CORRESPONDENT
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