MNG aircraft parked at Karachi Airport

Discuss issues and news related to PIA, Pakistani airlines and Pakistan's civil & military aviation.
cheetah
Registered Member
Posts: 402
Joined: Fri Aug 06, 2004 5:46 am

Re: MNG aircrafts parked at Karachi Airport

Post by cheetah »

zerbaer

Do you know the situation of Air Universals 3rd 747 from ANA. It apparently has a Pakistani registeration. Makes me wonder how? also Capt Dara brought in the aircraft from Tokyo.. thats another question?

I dont see this aircarft in active schedule all of December.
zerbaer
Registered Member
Posts: 500
Joined: Mon Dec 12, 2005 4:56 pm

Post by zerbaer »

cheetah

believe the ANA (JA8174) was in temporary storage in Japan after sale to Air Universal in Oct 2005. Universal lists a 3rd B747 in its fleet: 5B-AUC which is ex JA8174 (ANA). 5B is Cyprus registration while JY is Jordan !

It is thought that 5B-AUC was given Pakistan registry AP-BIC (export C of A). The plane will now have to go through the CAA's C of A process & comply before it can be operated. It should have gone to Cyprus for registration and issue of C of A. Who knows how much work is needed on it before it can get into service. In any event with AP registration becomes the responsibility of CAA & the AOC holder PIA. Some are suspecting that PIA might have clandestinely purchased it !

It is noteworthy that the three aircraft have CF6-50 engines and PIA has plenty of spares & engines which they did not sell with the fleet.

Universal's JY-AUA is undergoing C check and engine SB work at Isphahani hangar - This was being done quitely but was discovered by the new SVP Engg and stopped. The mess up was announced by the SVP Engg in Man Comm meeting in first week Dec. However, later the work was resumed after issuance of back dated work orders which is managed by Engg's Planning & Projects section.

None of the five B747s were inspected or evaluated by PIA & CAA as is customary before leasing.

So two of the three Universal planes were/are not ready to meet the aim of leasing. PK's B743s have been deployed to make. Note - Two of the B743s will ground next year as management have decided not to have Section 41 mod done on them ! It is likely they will ground the entire B743 fleet by 2007/8 instead of 2010 as once envisioned for the fleet renewal program. Similarly the B737-300 fleet has Lap Joint modification due (limit is 50K cycles) and it will not be done. Understand PK have made arrangement to acquire B737-700NG from Boeing as replacement.

Kojak would have said: Who loves ya baby !
cheetah
Registered Member
Posts: 402
Joined: Fri Aug 06, 2004 5:46 am

Post by cheetah »

Interesting info zerbaer.

Air Universal operates on a Sierra Leone AOC but has shadily managed to register the 747 fleet in Jordan. They have also managed to acquire a Cyprus AOC, but UK CAA which oversees Cyprus CAA has refused to register the 747 fleet on the grounds that Cyprus does not yet have the technical experience to manage a 747 fleet.

I do feel that PIA and Air Universal have struck an under the table deal to get an additional aircraft operational for Hajj.

WIth two 747-300s grounded next year, i suspect some of the 747 crews will have to be sent onto the 777s as their is a major vacuum developing in the A310 fleet.
zerbaer
Registered Member
Posts: 500
Joined: Mon Dec 12, 2005 4:56 pm

Post by zerbaer »

Cheetah

Thanks for the additional info.
Moin
Registered Member
Posts: 3165
Joined: Sun Aug 08, 2004 11:17 am

Post by Moin »

I don't get it. The 2 74M's are 1979/80 vintage and the 743's are 1984/85, so why are they being grounded next year while the 74M's continue to fly till 2008?
Moin Abbasi
zerbaer
Registered Member
Posts: 500
Joined: Mon Dec 12, 2005 4:56 pm

Post by zerbaer »

Moin,

Vintage has nothing to do with management decisions to ground & scrap. Two oof the B743s did not have Section41 modification (limit is 20,000 cycles) incorporated at time of lease/purchase. The B742s had the mod done many years back - PK's B742s had a very high mod status & is a criminal the way they have been junked.
Amaad Lone
Registered Member
Posts: 2932
Joined: Thu Aug 05, 2004 7:10 pm
Location: Lahore

Post by Amaad Lone »

Maybe the ANA 747-200B (AP-BIC), which was built in 1986, has been purchased by PIA to replace one of the 747-300s, while the leased 777-200ER will replace the second.

Maybe Zerbaer or Cheetha can let us know how much does it cost to upgrade the section 41??

Amaad
zerbaer
Registered Member
Posts: 500
Joined: Mon Dec 12, 2005 4:56 pm

Post by zerbaer »

AP-BCL & AP-AYW were sold very recently i.e just about time of getting B742 on wet lease for Umrah in August '05. Makes no sense to sell or junk your own & then turn around and lease ! A300B4 fleet & some of the worthy & paid off B742s would have handled it all. Now we have the many millions of $ in lease payments which are a piece of cake for approval purposes. PK is leasing ostensibly for Hajj (at one time known as Summer Season) 10 aircraft of highly questionable standard. this does not include 2 freighters operating on charter and the 6 A310s with P&W engines dry leased for 10 years as replacement for A300B4 fleet. BFU/B743 the other day had engine trouble & had to be ferried back - Guess it was making up for the non availability due to due maint. of some of the wet leased B742s from Universal.

Section41 mod normally is scheduled with heavy maintenance like a check D. The mod kit is free from Boeing. A rough guess of D check + Section 41 could be over $1.5 million each. Aircraft having completed 20K cycles can not fly w/o the mod. Oct 2007 is the final cut off date, globally.
Amaad Lone
Registered Member
Posts: 2932
Joined: Thu Aug 05, 2004 7:10 pm
Location: Lahore

Post by Amaad Lone »

$1.5 million does not sound like a lot of money, considering the replacement is an aircraft of similar vintage costing around $5 million.

Plus $1.5 million includes a D-Check, increasing the life of the aircraft by around 20,000 hours.

Amaad
zerbaer
Registered Member
Posts: 500
Joined: Mon Dec 12, 2005 4:56 pm

MNG

Post by zerbaer »

It is not a lot of money specially when you keep in mind that D check is a scheduled & budgeted item in any plane's life and can not be considered an unafforable defect of particular equipment. Also been paid off, owned fleet doesn't carry capital costs/financial charges etc. PK have almost always given high mait. costs as reason - that's what was quoted in papers when the CX B743s were taken on lease. Strange & unheard of maint. practices executed via Planning section of Engg. have historically, always yielded horendous costs but no effort ever has come to light which would aim to salvage & restore standards. Even the B777 is not exempt from it and is evident from its maint & cost record at PK.

PK normally will first lease planes and make the lessor very rich. In the end they end up buying the equipment having paid many times its market value. The CX B743s had an average market value at the time PK leased them of less than $8 million per plane! You can see that in CX's annual report of 1998 and their Chairman's letter. They were paying over $30 mil/year just for maint. arrangement with CX, not to mention the engine agreement now via Rolls Royce costing above $2000/hr (after renewal by last management). Equally frightful is the story of PW powered A310 on dry lease.

With too many wet leased planes, for no apparant reason, PK employees should pay attention to the implications which are not limited to cockpit crews. The debts of the corp. naturally are passed on to the publilc & that should sober anyone remotely sane.
Amaad Lone
Registered Member
Posts: 2932
Joined: Thu Aug 05, 2004 7:10 pm
Location: Lahore

Post by Amaad Lone »

The CX B743s had an average market value at the time PK leased them of less than $8 million per plane! You can see that in CX's annual report of 1998 and their Chairman's letter.
By 1998 these planes were around 11-12 years old, and Cathay had depreciated them totally, accounting wise.

The price in the annual report was probably the book value, and not the market value. I don't think a $100 million jet is worth $8 million after just 12 years of service.

In 2002 PIA purchased the entire Cathay fleet of six 747-300s for $65 million. This does not include the lease payments paid for three years, which I am sure you can verify.

I also belive PIA should have bought these 747s in 1999 when they were intially leased, but maybe at that point Cathay did not want to sell them.

Amaad
User avatar
kalc
Registered Member
Posts: 18
Joined: Thu Nov 10, 2005 4:31 pm

Post by kalc »

Very true zerbaer however people have historically read of these scandals but nothing comes of them if you remember the avm director of engineering had a number of cases against him and he took of to England under pretext of being ill later all the cases and inquires against him were dropped when the higher ups intervened. i have heard that he is one who is behind air universal and thus gave them this really lucrative deal
:roll: well such is our nature
zerbaer
Registered Member
Posts: 500
Joined: Mon Dec 12, 2005 4:56 pm

Post by zerbaer »

The price in the annual report was probably the book value, and not the market value. I don't think a $100 million jet is worth $8 million after just 12 years of service.
CX annual noted value as Net Realiseable Market Value. It was something like HKG700 million for 6 xB743 & 7 x B742 & suspect spares were a part.
zerbaer
Registered Member
Posts: 500
Joined: Mon Dec 12, 2005 4:56 pm

CX

Post by zerbaer »

I also belive PIA should have bought these 747s in 1999 when they were intially leased, but maybe at that point Cathay did not want to sell them.
Belileve it was lease with purchase option and the purchase option was $30 million ea.
zerbaer
Registered Member
Posts: 500
Joined: Mon Dec 12, 2005 4:56 pm

CX

Post by zerbaer »

The price in the annual report was probably the book value, and not the market value. I don't think a $100 million jet is worth $8 million after just 12 years of service.

In 2002 PIA purchased the entire Cathay fleet of six 747-300s for $65 million. This does not include the lease payments paid for three years, which I am sure you can verify.
Market determines the price. Look at gold prices.
while airliners are very expensive and support operations/business worth a lot more, their market value is another matter. Used airplanes can be had for very very low prices compared to new aircraft, but the operation costs in comparison appear outlandish. New equipment & technology is essential but there are coherent and non destructive ways of going about it - Its a continous renewal process prdicated on many factors. I have not known customers selecting an airline/flt on basis of the type or age of aircraft. BA 'till not so long ago continued to operate B747-100 to/from ISB. Age of an aircraft is not the single factor. With aircraft worth less than $1.5 million Orient Thai & Universal have been guaranteed well over $20 million in business/revenue by PIA for a three month period. Ofcourse fuel & other costs are not part of it. PK sold its five A300B4 plus BEL which was on dry lease then bought for merely $10.1 million but they made possible an operation worth many many millions.

From what I can remember the lease rental alone probably was $170K/plane (cant be sure it was over six years back. Then PK was paying nearly $1500 per flt hour for a guaranteed 3000 hrs/plane/yr for aircraft maint. Engine & APU ... etc maintenance was seperate.and all maint. upto C check was by PK. This does not include the leasing of engines due to unprecedented removals (over 22 removals in first 18 months or less) plus five Spare engines were kept on lease. This year one or two RB211 engines were again taken on lease from RR. At present of the 5 spare engines in PK inventory none are serviceable !! The actual costs of the entire thing since 1999 runs into a few hundred million dollars.

On the dry leased A310 aircraft PK have already had to buy one spare engine with estimated cost of over $5 million. They will need atleast two more engines as spare support. So, like the CX example, PK is paying lease rental, enhine maint per hour under Fleet Management Program to P&W, buying spare engines and components and doing all other maint at its own cost. You can imagine costs over the 10 year lease period. End of lease period there is always the very tricky matter of return of planes - They have to be in the condition they were when delivered. Any deficiencies have to be paid for. The costs of having to lease planes to make up for A310s disadvantages for the Hajj operation are another cost factor not to be ignored.