PIA in negotiations to purchase more Boeing 777s !

[PK777]

Exim Bank to finance PIA's Boeing 777 deal

ARIF RANA

ISLAMABAD (November 01 2005): The US Exim Bank will finance PIA's deal to purchase Boeing 777 aircraft. This was disclosed by acting chairman and president of Exim Bank James Lambright in an interview with Business Recorder during his stay in Islamabad.

The national flag carrier is buying more Boeing 777 aircraft for its fleet. Negotiations are under way for finalising modalities of the deal that may be close to $1 billion.

The commitment period for payment may stretch over three years. It would be PIA's second major deal for 777 aircraft during the last few years.

Lambright counted various other areas for which Exim Bank intends to facilitate Pakistan's public and private sectors for import from the US.

These were locomotives for railways, agri appliances, power and housing sector machinery. He, however, did not give priority to big dams for financing, saying construction of big dams involves many complexities such as environmental hazards, displacement of huge number of people and damage to a large area of land.

Coming back on PIA deal, James Lambright said Exim Bank would follow previous pattern PIA finance PIA deal for Boeing aircraft.

The Exim Bank acting chief added he had a meeting with PIA Chairman Tariq Kirmani to discuss details of the deal.

According to him, the new deal is part of the PIA policy of continuously upgrading its fleet. He said: "We are working with the PIA for buying new airplanes for its fleet and look forward to work in the future as well."

He had also held meetings with the adviser to prime minister on revenue and finance, railways minister, agriculture, members of the government economic team and heads of Pakistani banks during his stay for wide-ranging discussions on various issues of interest.

He said Pakistan railways is interested in buying 75 US made locomotives which, he believed, were more efficient, reliable and fuel efficient than Chinese and Japanese made.

He sounded upbeat about Pakistan's economy. He did not see any serious fall-out of October 8 earthquake on the country's economy.

He said: "No doubt earthquake is a big blow to Pakistan but, I believe, it was fully capable of coping with the situation."

He said despite deadly earthquake and its aftermath, Pakistan's economy will keep on growing in coming years and this factor will maintain Pakistan as a promising destination for investment and trade.

James Lambright counted various factors that would help Pakistan maintain its economic growth in the future. Among these he listed reforms, more trade and exports during the last few years, sizeable foreign exchange reserves and improved balance of payment.

He said Exim Bank would play more active role in the future to facilitate public and private sector in trade with US companies.


Copyright Business Recorder, 2005

[Falcon598]

Wow, this is unexpected news. I had no idea they would think of purchasing new aircraft so soon after just recieveing new aircraft. First the ATRs now possibly another batch of 777s very interesting.

[Kashif]

Not really that surprising. They have to replace the 747-300's. With the current oil prices, the quicker the switch can be made to more fuel efficient new aircraft, the better.

Let's hope the after this deal, PIA can replace the A310's with 787's or A350's

[Amaad Lone]

PIA is due to recieve three 777-300ERs in 2008, which will probably replace the two comibs, along with provide capacity for growth in traffic.

That still leaves a requirement to replace the 747-300s, which PIA will probably start phasing out from 2010 (when the oldest one is 25).

I can see PIA ordering more 777-200LRs for the entire North American network, and further 777-300ERs for UK and Saudi Arabia.

The 200ERs can be used to replace some of the A310 routes, as by then even the A310 fleet will be nearing 20 years of age.

I would guess the next major purchase will be the 787.

Amaad

[smarties]

PIA is due to recieve three 777-300ERs in 2008, which will probably replace the two comibs, along with provide capacity for growth in traffic.
Amaad

I think that the 777-300ER which are due in 2008 are most probably replacements for the 743's and not the 74Ms.

PIA will probably obtain 2 A310Fs, and this will probably replace the 74M.

[BOEING777]

I'll have to dig out the article, but PIA expects to recieve its first 777-300ER in 3Q/4Q of 2007, not 2008.

[behramjee]

Negotiations are under way for finalising modalities of the deal that may be close to $1 billion.

A discounted B 777-200ER sells for $ 120 million.

A discounted B 777-300ER sells for US $ 155 million where as the -200LR for around US $ 130 million.

A discounted B 787-800 sells for US $ 88 million.

If I was in charge of PIAs deal and was given a $ 1 billion budget, I would choose :

a) 3 B 788s to be delivered by 2010 to gradually replace A 310 fleet thus providing easy integration of this aircraft type into PIAs fleet for the 2010-25 period...$ 264 million

b) 1 B 772LR...$ 130 million...in order to make all ORD, JFK, YYZ flights operate nonstop from PAK rather than via MAN...thus PIA would have a fleet of 3 B 772LRs...one dedicated to 4 weekly JFK nonstops + 1 to LAX 3 weekly and 1 for YYZ and ORD.

c) with $ 606 million remaining, I would go for 4 B 773ERs to cover replacing the B 743s on high density UK routes especially.

[raza]

I think they should consider two used 747-400M for replacing the Combis

[AbdulAziz]

asslam u alikum

I prefer to PIA to purchase A340s insted of B777s. I think A340s are more better in economic point of view than B777s.

A.Aziz

[BOEING777]

asslam u alikum

I prefer to PIA to purchase A340s insted of B777s. I think A340s are more better in economic point of view than B777s.

A.Aziz

In what respect are they better?

They cant carry as much cargo, have less range, is less wider than the 777 hence less fare paying passengers aboard and less room for them, has a slower speed thereby increasing travel times and has higher fuel burn too compared to the 777. Hardly what Id call advantageous. How many A340's have been sold- less that 400. How many 777's sold- nearly 700- making the 777 family the fastest selling widebody in aviation history.

The only thing that the A340 has going for it is the discounted prices by AB- and even that hasnt stopped the likes of SIA dumping its entire A340-300 fleet for 777's. And it wont be long before SIA dumps the A340-500 either- it has only 5 in a Boeing dominated fleet- its only because Boeing had no rival to the A345 that it went to Airbus.

[raza]

I do not think that EXIM would offer any financing for the A340?

[Charliedelta11]

ur right..the main aim behind getting the 777's was done keeping in mind the ageing 747 fleet..the A310's are there to stay for quite some time..until PIA gets a suitable replacement..i must say the new chairman is really keen on carrying out a mssive overhaul of the entire fleet..the phasing out of the 747-200's..and the A300's and the F27's are next inline..
bringing in 6 A310's...8/7 ATR's..then the A330 deal(lets hope it goes ahead)..along with the 777's..wow..lets hope PIA does leap ahead of all other airlines..oh yea..as far as the A310 F series is concerned..i remeber saying once in this forum only that it is in one of PIA's future fleet expansion plans....with what i've heard...

[B777240ER]

then the A330 deal(lets hope it goes ahead)..

I doubt it. PIA is more likely to go for B787 or A350

Edit: I just read yur thread...

[AN]

lets end this debate once and for all
the 777 is a more economical plane to operate than the 340. its a simple and well known fact.

the bus might be cheaper than the boeing, but when it comes to fuel burn and seat cost, the boeing wins everytime.

[GrandSlam]

i agree wid AN....