Malaysian court releases seized PIA Boeing 777

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A Malaysian court issued permission to release Pakistan International Airlines (PIA) Boeing 777, which was impounded at Kuala Lumpur Airport for nearly two weeks due to a British court case over unpaid lease dues.

On January 27, 2021, the Kuala Lumpur High Court ordered the immediate release of the Boeing 777, registered as AP-BMH, which was seized on the tarmac of Kuala Lumpur Airport (KUL) earlier on January 15, 2021. The plane was held due to a legal dispute over unpaid lease liabilities among the national flag carrier of Pakistan and the leasing company AeroCap at the High Court of London. 

According to local media, the Malaysian court ordered to cancel the seizure of PIA Boeing 777 jet after both arguing parties, PIA and Peregrine Aviation Charlie, the owner of two PIA’s leased aircraft, reached an amicable settlement to the dispute at the High Court of London.

The legal dispute between PIA and Peregrine Aviation started in October 2020, after AerCap, the Dublin-based leasing company which leased two Boeing 777s for PIA, filed a case in London court over the airline’s failure to pay the leasing dues reaching $14 million.

Having initially agreed with Aercap to pay $580,000 in monthly lease liabilities and an additional $325,000 in monthly obligations for aircraft maintenance reserves, at the London court PIA argued that the maintenance payments should not be included in the invoice. 

The national flag carrier of Pakistan declared that the unfulfilled obligations for maintenance reserves, which have already reached $2 million, are calculated according to the flying cycle each time the aircraft engine is started and switched off. However, the airline claimed that two leased Boeing 777 planes, the AP-BMG and AP-BMH, were stored for a six-month period from April to September 2020 due to the ongoing pandemic. 

Meanwhile, AeroCap insisted that the leasing agreement did not cover the pandemic as a clause included in the contract, which could prevent the airline from fulfilling its obligations. The lessor asserted that PIA must follow the contract and pay its liabilities regardless of how much two aircraft had been flying during the COVID-19 period.

The High Court of London hearing was adjourned as both parties agreed to settle the issue out of court.

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