Pakistan International Airlines Corporation Limited (PIACL) has resolved a significant financial issue by settling a $26 million lease dispute with Asia Aviation Capital Limited (AACL) over two aircraft. The conflict had its roots in a leasing agreement that required PIACL to return the aircraft after necessary repairs at a certified maintenance facility. However, delays in redelivering the planes resulted in a legal battle between the two parties. In 2019 and 2021, PIACL was ordered to pay AACL $12.058 million, and in September 2023, AACL’s lawyers demanded an immediate payment of $31.3 million.
To negotiate a settlement, Caretaker Prime Minister Kakar authorized a team to travel to Kuala Lumpur in October 2023. They successfully convinced AACL to accept a reduced amount of $26 million. This settlement was presented to Kakar on October 11, attended by ministers and senior officers from the Ministry of Aviation and PIACL. It was agreed that this $26 million settlement was in the best interest of Pakistan’s national flag carrier.
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The Ministry of Aviation has requested the Economic Coordination Committee to approve the settlement agreement in accordance with a letter of intent. The Finance Division is directed to arrange a grant of Rs. 7.3 billion for PIACL to clear its outstanding dues to AACL. Additionally, a bridge financing of Rs. 8 billion has been consented to by the ECC to facilitate the transfer of title for the two aircraft and meet immediate working capital requirements. This resolution marks a significant financial victory for PIACL and ensures the stability of Pakistan’s flag carrier.