PIA to lease seven new jets, expand fleet

[ACE OF THE AIR]

Gentlemen, here are some details on the fleet:

ATR - Ideal for domestic short, thin routes.

A310- They have recovered their capital investment. So the only expense being incurred by these aircrafts is basically operational expense.

B777 - They have proved to be a reliable workhorse on long routes, hence the repeat orders

B787- Very fuel efficient and ideal for thin long routes. But PIA is laying off buying it since it's still going through the "teething phase." Secondly, Being a composite heavy aircraft, PIA will need serious infrastructure investment to keep it flying ,OR have an agreement with a foreign MRO who has the technical capability to do so. The latter is not that big an issue.

@ACE OF THE AIR Your input on this thread would be appreciated

There is no teething phase, with current routes, loans and mis-management, PIA will never turn profit enough to buy new planes. Lease is the only option.

Sir,
Pakistan has a problem of tunnel vision approach hence most of the decisions that are taken are taken shortsightedly.

There is also a problem of common knowledge on how aircraft operation is handled and kept profitable. One only thinks that if we buy an aircraft it would repay within the very next minute.

Then we all think that aircraft are supposed to bought to make them profitable. This is not true.

The question that pops up in our head how can it be?
The answer is very simple Aircraft require a large amount of cash which would limit numbers hence to make it profitable the numbers should be atleast at break even. For example B-737-8 Max fly away costs $100 million per aircraft, to make it economically viable an airline requires atleast 10 aircraft so that it is able to acquire maintenance and training at home.
The cost of aircraft alone is $100mil x 10 = 1000 million. This includes all training.

To fly this aircraft from USA to Pakistan would cost about $ 2 million. When this aircraft lands at a Pakistani Airport Import duty has to be paid which is about 10-15 %. After this at the end on the year Property Tax would also be paid on the price paid.

Then there is the requirement of Insurance which is also very high and could cost atleast $2 million per aircraft.

_______________________________________________________________________________________________
There are ways to reduce these costs.
There are various types of Aircraft leases, most common types are Dry lease and Wet lease.
Dry Lease is commonly what Pakistan prefers, however during the months of Haj Wet lease is also used.

What is dry lease?
Dry Lease.
This type of lease allows an airline to purchase an aircraft on installment over a period of time. It is preferred because the Aircraft can be registered in the country where the airline is based, where as local population can maintain and fly these hence creating employment. Once the period of lease is complete the Airline would have the option to purchase this aircraft or return it to the owners.

Here the airline operating would also be required to maintain the aircraft and also the insurance. How ever if the owners wish to reinsurance they can (mostly done). If there is a modification required by the manufacturer and a kit is sent to the owner then the owner is going to either get this done by PIA or from any other maintenance provider as he may feel fit.

In this kind of lease profit and loss are to be calculated minutely so that the aircraft remains cost effective.

What is Wet Lease?
Wet Lease.
This type of lease does not allow the aircraft to be purchased by the airline on the end of the contract. The aircraft remains the property of the owners and they are responsible to maintain and fly and insure this aircraft. This is normally at a higher price but for the airline acquiring it is the most profitable option as what ever is earned over the fixed cost is their profit.

The issue is these aircraft are not registered with the local registration no maintenance setup is required no flight crew is required. How ever some employees may be required domestically reducing costs.
________________________________________________________________________________________________

Current Aviation Policy in Pakistan requires an airline to have no aircraft more that 20 years from the date of manufacture even if they have been in storage since the time they were made. This is the reason old aircraft are being replaced by new ones.

Then there is also a requirement of maximum import age (15 years old).

So some of the early ATR-42's & B-777's owned by PIA will be up for replacement soon.
A-310's are above the 20 yrs limit and have to be replaced within 2 years.
________________________________________________________________________________________________

Boeing Vs Airbus

Boeing aircraft are more expensive as compared to Airbus on initial costs.

________________________________________________________________________________________________
Previously PIA has not been allowed by Boeing to convert the orders of B-777's to B737-800's which caused them a lot.
The new B-777's that are going to be ordered would take an other 3-5 yrs to come if PIA does order as replacement to A-310's.

A-320's were not available at the time when Pakistan wanted to replace their B-737's.

________________________________________________________________________________________________

Options and requirements of PIA
All Year
Pakistan-Saudia route requires aircraft that are atleast 500+ seats.
Regional routes including China and Far East and Turkey
150-250 seats

Seasonal
Pakistan - US and Canada require 350-450 seats.
Pakistan - UK 350-400 seat

These aircraft are also used on domestic flights because of positioning so that they may operate to other countries.
Hence using one or two type of aircraft can not be a viable option.

Sorry no links. Etihad airlines is my source.



Well I'm not a technical guy, but from what I've been told, Etihad has 3 787-9 active and the APU is giving them headaches. Plus there is another 787-8 which on and off used to have the same issue. Ultimately the APU had to be replaced. Now I have no clue how much an APU costs. But Boeing has promised to replace 2. The third one hasn't gone crtical yet.

APU, Battery issues on B-787 have been addressed.
A380 issues have also been addressed. The worst was the Qantas A-380 incident.

The glitches get sorted out quite quickly. Some, like the B777 engine fuel heat exchanger freeze up issue show up much later.

This problem was resolved by replacing all the heat exchanger with a modified design after this event reappeared on an US aircraft shortly after the British Airways B777 crash landing in London.

 

[Nefarious]

And they need to stop harassing people to get bribes at the airports. Scum bags.

 

[PurpleButcher]

I always make it a point to fly PIA, I don't know if I am the only person in Pakistan who thinks their service isn't as bad as people claim it is? Just the other day, a friend of mine was cribbing that he was accompanying his brother who has a special needs child and the PIA staff declined to offer them additional pillows to make the child comfortable but that's when his brother pointed out that before they declined to give them any more pillows, they had already received 11 pillows for three seats. Its this kind of unfair criticism that is forcing PIA into a loss and discouraging people from flying PIA.

Brother with the same optimism, i decided to use PIA after three years this summers. It was the WORST experience ever.

WHile flying from dubai to islamabad on 2nd July during fasting, the Air Conditioning was not working while on the airport, the people were getting agitated and asking again and again, but the hostess refused to answer initially and then said it will turn on soon. After 30 minutes of delay while being stuck in the suffocating airplane with my one year old daughter , when i confronted the management, I was told the plane's AC is faulty and temperature will get better once we reach higher altitudes.

And on my return journey, my luggage was accidentally sent to manchester instead of dubai.

No to PIA as long as this management continues.

 

[Skywalker]

I am pretty sure there's kickbacks involved in these leases as well....

PIA should either be privatized or simply shut down/liquidated.

And what's your expertise on this?

 

[Faiez]

And what's your expertise on this?

check the lease rates and compare with industry averages.

 

[Faiez]

The cost of aircraft alone is $100mil x 10 = 1000 million. This includes all training.

To fly this aircraft from USA to Pakistan would cost about $ 2 million.

There are discounts. So maybe 70-80 million ?

Cost to transport from USA to Pakistan cannot be that high. Unless you're talking about all ten aircraft in 2 million.

737-8 would be around $5,000-7,000 per hour to run...

 

[ACE OF THE AIR]

There are discounts. So maybe 70-80 million ?

Cost to transport from USA to Pakistan cannot be that high. Unless you're talking about all ten aircraft in 2 million.

737-8 would be around $5,000-7,000 per hour to run...

It is around 200000 USD per aircraft so the figure for the 10 aircraft is 2 million USD. However you have to add the Import Duty that is going to be atleast 10% of the price of the aircraft and also the insurance.

It is really very difficult to calculate the exact price because of many factors and customization, usually PIA tends to have there aircraft that can be converted to VVIP transport aircraft hence the price is more. There are also other factors like these aircraft are to be used on routes that usually USA does not allow like Iran used to be before the Nuclear Deal.

PIA has to operate at the highest operating cost because the domestic flight fall in maximum maintenance zone. Typical flight time from Karachi to Lahore for a B-737 is 1hr 37mints .
If this was 2 hrs dead then its operational cost would have been cheapest. The same is the case with Islamabad, Peshawar, Sialkot. maximum time on these sectors is 1hr50 mints.

Multan, Faisalabad and Quetta are 50 mints.

Karachi to Dubai, Abu Dhabi, Muscat, Delhi, Bombay and Dhaka are also 1hr45 mints.

Then there are some routes that have to be flown like Multan - Lahore / Islamabad which is not more than 40 mints...

Hope this is going to be informative.

 

[imiakhtar]

its need and routes matters every airline have such fleet now look hare

That route network is old. Many of those routes such as Hong Kong, Glasgow, Amsterdam etc have been dropped.

And fly direct flights to texas munich amsterdam chicago etc where many pakistanis live

Why don't they charter a Sikorsky VIP chopper for you whilst they're at it?

what we fly on Americas EU and east asia ? B-777s great

PIA has reduced the take off weight of their 777-200er aircraft bcause they don't need it's heavy lifting abilities. PIA need to downsize further from the 777 and choose either the A330 or 787. There is no point considering a 747 like for like replacement such as the 777-300ER or 747-8.

But PIA is laying off buying it since it's still going through the "teething phase."

PIA is laying off buying anything because it doesn't have the money to but.

I'm talking about the Boeing 787 still having "teething issues" i.e. technical problems till today, in comparison to the B777 or even the A330.

The teething issues are gone. The 787 has a technical dispatch reliability close to 99% which is comparable to the A330 and 777 which are both about 99.4%.

Specific to RR engines, not GE.
Just like the Qantas A380 engine failure was also specific to RR engines, and not Engine Alliance.

Actually, the Engine Alliance engines have suffered an uncontained engine failure over Australia.

Absolutely right, the issues were strictly related to RR engines,

Not really.

All engine manufacturers have uncontained failures on almnost a yearly basis. In fact, the GE GenX on the 787 and a variant on the 747-8 have had more issues than the RR Trent 1000. Here are some examples:

GEnx icing issue prompts 747-8, 787 restriction, route withdrawals - 11/24/2013 - Flight Global


The first failure of one of General Electric’s new GEnx-1B occurred in July at Boeing’s 787 facility in South Carolina. During a routine engine run-up of a new 787 during a taxi test, metal debris was ejected out of the back of the engine, igniting a small grass fire. An initial inspection points to the failure of a shaft in the engine.

At the end of August an inspection of a GEnx-1B on a different 787 that had yet to run showed a similar crack in the same area of the fan midshaft. That engine was inspected to help investigators determine the cause of the cracks.

Then, last week the pilot of a new Boeing 747-8F cargo airplane rejected a takeoff in Shanghai after losing power in one of the four GEnx-2B engines while accelerating down the runway. Initial inspections of the engine show similar damage in the low pressure turbine section of the nearly identical engine to those found in Boeing’s 787s. The 747-8F had flown around 1,200 hours since being delivered.

NTSB Urges Action After Engine Failures in New Boeing 787, 747 Airliners | WIRED

This is why Etihad went with GE engines

No. EY went with GE because the package GE offered was cheaper for EY.

For example B-737-8 Max fly away costs $100 million per aircraft,

More like $50m.

The cost of aircraft alone is $100mil x 10 = 1000 million.

More like $500m.

When this aircraft lands at a Pakistani Airport Import duty has to be paid which is about 10-15 %.

As part of the recent aviation reforms, import duty is no longer payable on delivered aircraft.

Read more about plans here at the Pakistan aviation policy 2015:

http://www.caapakistan.com.pk/upload/AT/NAP-2015.pdf

The more astute members will note the background image on page 36 has been "stolen" from a Jeppessen Airway map which I posted here:

Pakistan Civil Aviation | Information & News. | Page 27

http://img600.imageshack.us/img600/3118/42529157.jpg

Boeing aircraft are more expensive as compared to Airbus on initial costs.

Not really.

Previously PIA has not been allowed by Boeing to convert the orders of B-777's to B737-800's

Boeing doesn't want to lose deposits. PIA can order any Boeing they want.

A-320's were not available at the time when Pakistan wanted to replace their B-737's.

There has never been a shortage in the availability of A320s. Not now, not 10 years ago and nor will there be in 5 years time.

Pakistan-Saudia route requires aircraft that are atleast 500+ seats.

No. The ME routes require at most aircraft with 300 seats. No point having 400+ seat aircraft when they're going to be flying half empty for much of the time.

Seasonal
Pakistan - US and Canada require 350-450 seats.
Pakistan - UK 350-400 seat

Nothing bigger than a 787-9 or A330-300 needed.

However you have to add the Import Duty that is going to be atleast 10% of the price of the aircraft

Not anymore. See policy link above.

usually PIA tends to have there aircraft that can be converted to VVIP transport aircraft hence the price is more.

No they don't. None of the current 777/A310 have been and any standard Airbus/Boeing can be converted.. Only aircraft in such states were a VIP 737-300 AP-BEH bought by Benazir and later transferred to PIA by Sharif and an A310 gifted by Qatari gov AP-OOI.

There are also other factors like these aircraft are to be used on routes that usually USA does not allow like Iran used to be before the Nuclear Deal.

Nonsense. Doesn't stop Turkish, Emirates and countless other airlines flying to Iran.

Karachi to Dubai, Abu Dhabi, Muscat, Delhi, Bombay and Dhaka are also 1hr45 mints.

You need to look at an Atlas.

To help you out, I've plotted the GC route from Karachi to those airports with a 737 cruise speed on M.78. As you can see, once you factor in 30min total taxi time, only Karachi-Lahore/Delhi is a 1hr 45m sector which matches PIA's allocated sector time for Karachi-Lahore .I'm not sure why you though Dhaka would take less than 2 hours:

Copyright © 1996-2015 Karl L. Swartzhttp://www.kls2.com/~karl/

Hope this is going to be informative.

It would be if you did a little more research.

 

[Jango]

Actually, the Engine Alliance engines have suffered an uncontained engine failure over Australia.



Not really.

All engine manufacturers have uncontained failures on almnost a yearly basis. In fact, the GE GenX on the 787 and a variant on the 747-8 have had more issues than the RR Trent 1000. Here are some examples:

GEnx icing issue prompts 747-8, 787 restriction, route withdrawals - 11/24/2013 - Flight Global

That is why I mentioned only the Qantas accident.

 

[Indus Falcon]

Actually, the Engine Alliance engines have suffered an uncontained engine failure over Australia.

It would be if you did a little more research.

Would be better if you did your research before you criticized others.

The accident occurred shortly after the aircraft took off from Singapore. At about 7,000 ft above Batam Island, one of the aircraft’s Rolls-Royce Trent 900 engines failed, sending debris into the aircraft’s left wing and fuselage, and onto Batam Island. There was significant damage to the aircraft’s electrical, hydraulic and other systems. The crew managed the multitude of system failures before safely returning and landing the aircraft.

Fact sheet
The ATSB’s investigation into the uncontained engine failure of a Qantas Airbus A380 over Batam Island, Indonesia on 4 November 2010

What happened and why

Shortly after taking off from Changi Airport, Singapore, the No. 2 engine on a Qantas Airbus A380 failed about 7,000 ft above Batam Island, Indonesia. The failure sent engine fragments through the left wing and damaged some of the aircraft’s systems.

The engine failure was a result of an oil feed stub pipe that was incorrectly manufactured with a thin wall that resulted in fatigue cracking of the pipe. This crack released oil into the engine during the flight, which caused an internal fire. That fire led to one of the engine’s turbine discs fracturing and then rapidly over speeding before it burst, broke free of the engine casing, and impacted the A380’s airframe.

What happened to the aircraft?

The damage to the aircraft from the disc fragments resulted in the aircraft’s hydraulic, electrical and other systems being degraded.

Despite the damage, the flight crew managed the multitude of system failures before safely returning the aircraft and landing at Changi Airport without any injuries to the crew and passengers.

What’s been done to prevent this from happening again?

The ATSB, Rolls-Royce, aviation regulators, and operators of Trent 900-powered A380s took a range of steps to ensure that engines with incorrectly manufactured oil feed stub pipes were removed from service or managed to enable the aircraft to continue to operate safely.

Rolls-Royce also introduced software that would automatically shut down a Trent 900 engine before its turbine disc over speeds, in the unlikely event of a similar occurrence. As well, Rolls-Royce had improved their quality management system and management of non-conforming parts.

Lessons for future safety

The damage to the aircraft’s airframe by the disc fragments highlighted a safety issue with the existing airframe certification standards. The ATSB has issued a safety recommendation to the United States Federal Aviation Administration and the European Aviation Safety Agency to review and incorporate any lessons learned from this accident into their aircraft certification advisory material regarding the minimisation of the hazards from uncontained engine rotor failures.

Media releases: 27 June 2013 - ATSB releases report into Qantas A380 engine failure

 

[Peaceful Civilian]

Hope, they give surplus to us. They need to improve the service with new jets. Bring new blood! !

 

[imiakhtar]

Would be better if you did your research before you criticized others.

DUH!!!!

I'm not referring to that incident which affected VH-OQA but a separate one which occurred as I stated on an Engine Alliance equipped A380 operated by Emirates Airlines. See here:

On 11 November 2012, an Emirates A380 aircraft, registered A6-EDA, departed Sydney Airport for Dubai, United Arab Emirates. While climbing through an altitude of approximately 9,000 ft, the crew reported hearing a loud bang, accompanied by an engine No 3 exhaust gas temperature over-limit warning. Shortly thereafter, the engine went through an uncommanded shut down. The crew jettisoned excess fuel and returned the aircraft to Sydney for a safe landing and disembarkation of the passengers and crew.

Investigation: AO-2012-150 - Engine failure involving Airbus A380, A6-EDA near Sydney Airport, NSW, 11 November 2012

Is that simple enough for you to understand or do you want me to break it down word by word?

 

[airmarshal]

I dont fly PIA and dont want to. I thought flying PIA was patriotic. But my money goes to pay salary of people who dont deserve to run an airline and are political appointees. Sorry my money is only for people who deserve to get it through providing me good service.

Why should the sentiment of patriotism apply only on customers and not those who run the airline? PIA has been run to the ground by successive governments. An airline which inspired and launched several international airlines, whose engineering and flying staff trained airlines across the world , is on crutches, not because of us but those who run it to favor their political friends.

 

[Indus Falcon]

DUH!!!!

I'm not referring to that incident which affected VH-OQA but a separate one which occurred as I stated on an Engine Alliance equipped A380 operated by Emirates Airlines. See here:

On 11 November 2012, an Emirates A380 aircraft, registered A6-EDA, departed Sydney Airport for Dubai, United Arab Emirates. While climbing through an altitude of approximately 9,000 ft, the crew reported hearing a loud bang, accompanied by an engine No 3 exhaust gas temperature over-limit warning. Shortly thereafter, the engine went through an uncommanded shut down. The crew jettisoned excess fuel and returned the aircraft to Sydney for a safe landing and disembarkation of the passengers and crew.

Investigation: AO-2012-150 - Engine failure involving Airbus A380, A6-EDA near Sydney Airport, NSW, 11 November 2012

Is that simple enough for you to understand or do you want me to break it down word by word?

Qantas was being discussed, you jumped in with Engine Alliance, Did you clearly mention Emirates Airline? Please sort out your mental issues before quoting me next time!

Secondly, I will let the forum decide if the Qnatas RR Engine blowing up was mores serious, OR Emirate Airline's Engine Alliance's Engine Shut Down.



Investigation: AO-2012-150 - Engine failure involving Airbus A380, A6-EDA near Sydney Airport, NSW, 11 November 2012
Emirates Airline Incident

Investigation: AO-2010-089 - In-flight uncontained engine failure Airbus A380-842, VH-OQA, overhead Batam Island, Indonesia, 4 November 2010
Qantas Accident!

Apologies to the respectable forum members for going off topic

 

[imiakhtar]

Specific to RR engines, not GE.
Just like the Qantas A380 engine failure was also specific to RR engines, and not Engine Alliance.

Here is the original ref to the A380 failure. The Failure that occured to Qantas VH-OQA was an uncontained turbine failure, a failure that IS NOT SPECIFIC to either RR or T900 engines as Jango inferred and as I pointed out similar failures have occurred on Engine Alliance aircraft as per my original quote here:

'Actually, the Engine Alliance engines have suffered an uncontained engine failure'

Qantas was being discussed, you jumped in with Engine Alliance,

Doesn't matter. I was correcting the suggestion that such failure types are not specific to RR engines. The only reason the whole world knows about the RR failure is because of the media attention. Similar to the RR engine, the EA GP7200 was beat up and punching holes as shown here:

Engine Alliance, Did you clearly mention Emirates Airline?

No, I didn't mention Emirates. However the fact that I mentioned Engine Alliance and over Australia (as opposed to RR and over Indonesia/Singapore) should have been enough for you to deduce I wasn't referring to the Qantas VH-OQA incident.