WASHINGTON, USA: Dec 11 (PNS) – The Pakistan International Airlines (PIA) is scheduled to receive delivery of two 777-200 ER Boeings in February and one in March 2004.
The signing of dollar 351 million loan approved by US Export-Import (EXIM) Bank for the first three, out of a total of eight aircrafts, is scheduled to be held here on Dec. 15. Phil Merrill, President and Chairman of the Board of Directors, Export- Import Bank of the United States,and Ahmad Saeed, Chairman and Chief Executive Officer, Pakistan International Airlines (PIA) will sign and exchange the documents, at a simple but befitting ceremony.
Sources said, PIA has arranged a bridge loan of dollars 150 million from the international market, to make pre delivery payments of dollar 196 million to Boeing for the first three 777-200ER aircraft scheduled in early 2004.
The total of 8 aircrafts E777 would cost $1.2 billion, through US EXIM bank supported financing. The record shows, when the present PIA management took over the Charge of the airline in April 2001, the airline was in severe financial difficulties.
“To retrieve the airline out of this situation, a comprehensive action plan was chalked out, based on operational, financial and administrative restructuring,” said the sources.
For sustained growth and profitability, it was decided to focus on fleet renewal programme, and a purchase agreement for induction of eight 777 aircrafts from Boeing was finalized in Sept. 2002. The delivery schedule decided was three 777-200ER in early 2004, two 777-200LR in early 2006 and three 777-300ER in early 2008. To support the eight aircrafts, the Government agreed to provide cash equity of dollar 150 million to PIA to be disbursed over a three year period, “and, PIA has received dollar 90 million already from the Government.”
The US EXIM Bank approval covers 85 percent of the aircraft purchase price plus 100 percent financing for the exposure fee. The total amount approved for the first three aircraft is dollar 351 million. Earlier in November 2002, PIA submitted a loan application to the EXIM Bank, and the PIA made a detailed presentation to EXIM Bank on the airlines’ business/fleet plan. Requiring nomination of a guaranteed lending bank, the PIA appointed Citibank as Guaranteed lender in December 2002. After the U.S. Congress approval, the EXIM Bank approved the guarantee on Feb. 20, 2003- and issued a firm commitment for first three aircraft and preliminary commitment for the remaining five aircraft.
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December 11, 2003 at 11:48 am