PIA pays $7 million to jet company after plane gets impounded in Malaysia

By
Murtaza Ali Shah
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A file photo of a PIA airplane. 

  • PIA informs London High Court that it has paid around $7 million to Peregrine Aviation Charlie Ltd
  • Leasing company had filed a case against PIA over its failure to pay the leasing fee
  • Lawyers for both parties sought an adjournment as they hoped that they could settle without a court order


LONDON: The Pakistan International Airlines (PIA) on Friday informed the London High Court that it has paid around $7 million to Peregrine Aviation Charlie Ltd in the case pertaining to two jets leased to it by the Dublin-based AerCap.

The development came after the Malaysian authorities seized a PIA Boeing-777 at the Kuala Lumpur airport last Friday, on the orders of a local Malaysian court, over the non-payment of aircraft lease dues owed to the Dublin-based AerCap.

Lawyers for both the PIA and the airliner sought an adjournment as they hoped that the full amount would be paid through an agreement without the court issuing an order against PIA.

Appearing online, the airline’s lawyer Erin Hitchens requested the judge to adjourn the hearing as the parties settle issues of the lease, rent, interest, lease, and the allocation of payment.

The Dublin-based AerCap's lawyer told the court: “The claimant’s position is that the sums were paid today by the defendant (PIA).”

The court was told that PIA didn’t make payments since it asked for the amendment of its claim in July and that it owed $580,000 per month to the airliner, but it didn’t pay and litigation was initiated.

The leasing company had filed a case against PIA in London High Court in October 2020 over its failure to pay the leasing fee — worth about $14 million — which had been pending for six months.

In response, PIA had maintained that since the COVID-19 pandemic had seriously affected the aviation industry, there should be a reduction in the overhead charges.

Meanwhile, the leasing company kept an eye on the activities of PIA, and as soon as it received the information of flight 895's scheduled landing in Malaysia, it appealed to a local court to seize the aircraft as per the international civil aviation leasing laws, sources added.

The Boeing 777 aircraft was seized after London High Court issued the order, an airline spokesman had said.

“A PIA aircraft has been held back by a local court in Malaysia taking a one-sided decision pertaining to a legal dispute between PIA and another party pending in a UK court,” a PIA spokesman Abdullah H Khan said in a statement at the time but today the flag carrier's lawyers raised no objections about the seizure of its plane in Malaysia.

The interim injunction ordered that the PIA is restrained from moving two aircraft in its fleet — a Boeing 777- 200ER with serial number 32716 and a Boeing 777- 200ER with serial number 32717 — once they have landed or parked at Kuala Lumpur International Airport until a further hearing on the matter.