Pakistan's Biggest Blunder

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Valkyrie
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Pakistan's Biggest Blunder

Post by Valkyrie »

I'm not sure if this has been posted here before. But its an article that leaves alot of unanswered questions. If this a repeat post, mods pls delete it for me.

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Pakistan's Biggest Blunder
By M.Taj



The recent decision to purchase eight Boeing 777 by PIA has to go down as one of the biggest blunders in aviation history both financially and commercially not withstanding the political agenda behind the decision.

To be fair to PIA but not it's chairman, the decision had all the hall marks of the current climate of capitulation to every whim and desire of the Bush administration by the Pakistan enforced military leadership. President Musharref made the point that we should not make rash decisions and every thing should be weighed up in its context in the wake of the 9/11 fiasco. Yet he has not turned his words into actions.

The purchase of the Boeing 777 by PIA is a clear indication as to who the Governmet is really working for. Every financial commentator in the aviation industry was at a loss to explain how Pakistan came to spend 2 billion dollars on aircraft cost 250 million dollars a piece when the same aircraft could have been purchased at a quarter of the price from the likes of American, United or Delta who are desperate to off load these aircraft types. Each one of the Delta, United and American airlines b777 is less than 4 or 5 years old comparatively brand new in airliner age. The aircraft have been "worked in" meaning all problems associated with those aircraft in service have surfaced and been dealt with - they are tried and tested. It is said that the United Airlines, a US airline company after canceling its fleet replacement and expansion program due to massive recession in the international airline sector had offered to sell three new B777 to the PIA at a price of $86 million a piece (against $250 million a piece the PIA will be paying to the Boeing company under the deal it had inked on November 16), and was also willing to further reduce it by another $5 million.

So why does PIA, who have a history of buying used aircraft all of a sudden feel that they can go straight to Seattle and get them of the Assembly line. The Answer is simple because Mr Bush, who is more concerned about keeping the Americans employed, said so. Two billion dollars on the already huge debt that our coming generations will never be able to get rid off is a shameful act of treachery.

But wait there is more to this treacherous act. PIA had supposedly shaken hands with Airbus industries to purchase the Airbus A310, which fits in perfectly with the routes of PIA especially the lucrative Middle East sectors. So infuriated by PIA (Pakistan's) decision to renege on the handshake were the Europeans that they immediately retaliated by halving Pakistan's export quota's into the European market. According to an EU diplomat "We feel betrayed by the PIA deal, we think PIA went back on a gentleman's agreement with Airbus and buckled under political pressure from US. We feel since we had helped Pakistan at the time of its need, Pakistan should have been more considerate in dealing with us." What they mean is that at the time when the US was slapping every kind of sanction on Pakistan it was the French and the Germans that still dealt with Pakistan. This to them is a slap in the face. In short when Bush no longer needs Pakistan again they will again put us on ice and this time we won't have the Europeans to turn to either. I would like to know how the people of Pakistan would benefit from spending 2 billion dollars on Aircraft that the vast majority of the 100 million Pakistanis would not even see let alone travel on. Would the 2 billion not be better spent on desperately needed things like schools and hospitals, oh I'm sorry that would benefit the people of Pakistan and not the Americans and our rulers I am sure you would get a good telling of from the BOSS!!

The chairman of PIA, who has since being given the job at PIA, recently cooked the books to show a profit. He has achieved this by cutting back on employee allowances, putting them in very basic third rate accommodations abroad, allowing the interior of the PIA aircraft's to deteriorate to an unacceptable level, so it seems looking at the very poor interior conditions of the B747-300s, cutting back on re-fits and interior maintenance. He wants us to believe that he is some kind of miracle worker for turning in a profit and that he has magically because of his, so called management skills, turned the airline around, therefore in some twisted way justifying the Pakistani regime's capitulation to the Americans at putting another 2 billion dollar mill stone on top of the already heavy burden of debt on the people of Pakistan.

I urge all Pakistani's to write to the chairman of PIA at PIAC headquarters Karachi demanding an explanation to:-

Why Airbus was dealt the way they were and the subsequent cost to Pakistan
Why when we were offered the same Aircraft for 86 million, PIA chose to Pay 250 million per aircraft.
Why the B777 when the Airbus aircraft fit much better into the lucrative mid east sectors
and finally when is PIA going to get a proper management instead of handpicked corrupt personnel

One final note, Even if the Pakistani decision makers received 5% KICKBACK on this deal alone it amounts to staggering 100 million dollars. Wow! It even puts Asif Zidari to shame.


bagold
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Post by bagold »

How much of the 'aid' that we received from the Bush people for being the 'good guys' does this reverse?

piafan
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Post by piafan »

The most interesting part about this deal is that it was secured a month before elected govt was going to take charge. The musharraf govt could have waited a month and let the elected govt decide based on discussion in Senate and Parliment. Same thing happend with Railway deal which was rushed and at the end turn out to be a sour lemon with most of new engines bought from China not working..and railway loosing billions of rupees.

Both these deals were rushed...just before elected govt was going to take charge.

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Post by Moin »

Here we go again. Besides it seems this person is trying to weigh the 777 against the A310, and its no contest. Even the A343. PIA did better to get the 777 than the A343. As for the UAL, AA and DL 777's being only about 5 years old and hardly used, is a matter for debate.
Moin Abbasi

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Charliedelta11
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Post by Charliedelta11 »

you are right in a way..this deal was quite not right..PIA should have gone for the A330 and the 747 400...
while the chairman himself is enjoying all kinds of priviledges at the airlines expense , the airline is once more , along with tis staff..wallowing in pity..

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B777240ER
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Post by B777240ER »

What I want to know is why were they going to buy the A310?

The A332 would have been too big for Europe routes whilst it would be perfect for Middle East routes.

PK made the right decision buy ordering B777's but they should have ordered some more B772 and base B773's.

BTW Did u get this article from Satribune

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Valkyrie
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Post by Valkyrie »

Moin wrote:Here we go again. Besides it seems this person is trying to weigh the 777 against the A310, and its no contest. Even the A343. PIA did better to get the 777 than the A343. As for the UAL, AA and DL 777's being only about 5 years old and hardly used, is a matter for debate.
B777 is a good plane no doubt about that. What he is really trying to ask is why did Pakistan have to pay such a high price? Esp since the industry was in a downward spiral and PIA is not known for buying brand new jets.

One more thing I'd would like to know is would PIA be able to secure funding needed to procure the B777 if it had decided to buy second hand?
BTW Did u get this article from Satribune
Had a feeling someone was going to pop this question. Nope, M.Taj is a aviation analyst and a contributor/moderator on FSPakistan who has working experience in the airline industry.

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Post by Falcon598 »

Well they intended to use the 777 on long and medium haul routes so it made sense to buy them new, because the ex-UAL, AA, and DL ones were just 772 not 772ERs so I believe they did not have the capability to fly to the routes PIA wanted to use them on so they got new ERs instead. As for the Boeing over Airbus, I truly love the 777, but it was most likely due to political reasons with the US that they purchased the 777 from Boeing. Thats just my take.

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Post by GrandSlam »

This article is nothing but crap....If PIA had gone for the Airbus A/C's then these kind of damn people would have been writing against the Airbusses....How come PIA have the history of buying used A/C's,Airbus 310s were purchased brand new,Most of the 747-200s and B4s were purchased brand new,I recently travelled on PK's 747-300(AP-BFW) and Boeing 737-300(AP-BEH) and the A/C's interior were in good shape...AGAIN THIS ARTICLE IS FULL OF CRAP NOTHING ELSE

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Falcon598
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Post by Falcon598 »

Ramiz Abid Mirza wrote:This article is nothing but crap....If PIA had gone for the Airbus A/C's then these kind of damn people would have been writing against the Airbusses....How come PIA have the history of buying used A/C's,Airbus 310s were purchased brand new,Most of the 747-200s and B4s were purchased brand new,I recently travelled on PK's 747-300(AP-BFW) and Boeing 737-300(AP-BEH) and the A/C's interior were in good shape...AGAIN THIS ARTICLE IS FULL OF CRAP NOTHING ELSE
Agreed.

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Post by PK777 »

Exactly Ramiz Abid Mirza, the Boeing 777 is a whole lot better technically and commercially. Something this guy has not taken into account is the 30+ airlines that are currently operating it.

E.g. BA, AA, United, Continental, JAL, Singapore, Emirates, Qatar (shortly), Etihad, Air France, Malaysia, Air India ANA, Cathay Pacific...and the list goes on... :wink:

Max
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Post by Max »

This General is selling Pakistan not even for peanuts.

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PakN'US
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Post by PakN'US »

In my opinion the article deals with not only the type of aircarfts, but mailnly the price differential Pakistan has paid $250 mil. to Boeing compared to $85 mil. asked by UAL. for each aircraft.
Just when you thought you were winning the rat race, along came faster rats!!!

Che
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Post by Che »

PakN'US wrote:In my opinion the article deals with not only the type of aircarfts, but mailnly the price differential Pakistan has paid $250 mil. to Boeing compared to $85 mil. asked by UAL. for each aircraft.
Exactly....the issue is not the type of the aircraft purchased, but the price paid for it....

With $250 mil a pop, PIA could have very well gone for A380s

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Falcon598
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Post by Falcon598 »

Wait UAL 5 yr old planes weren't 772ERs were they, becuase PK intended to use these on the North American and European routes, I don' think a regular 777 had that range??? :?