PIA plane seized in Malaysia over $14 million lease dispute

PIA plane seized in Malaysia over $14 million lease dispute

Due to a British court case over the jet's lease, Malaysian authorities on Friday 'seized' a passenger plane of Pakistan International Airlines (PIA) in Kuala Lumpur.

PIA Spokesman Abdullah Hafeez said that the Boeing 777 aircraft was seized by the authorities after a court order while the airline will pursue the matter through diplomatic channels.

“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,” PIA spokesman Abdullah H. Khan said in a statement.

The case involved a $14 million lease dispute, a PIA official said.

“We were told that the plane has been impounded on a court order while our legal team will pursue it in the Malaysian court, and we hope that we will resolve this issue as soon as possible,” the spokesman added.

Hafeez further said that Pakistan's High Commission in Malaysia was in close contact with the relevant Malaysian authorities and Pakistan International Airlines to address the issue while the alternative arrangements were being made for passengers due to fly from Kuala Lumpur back to Pakistan.

According to orders passed by the Kuala Lumpur High Court, the plaintiff of the case is Peregrine Aviation Charlie Limited and the matter pertains to two jets leased to PIA by Dublin-based AerCap, the world’s largest aircraft lessor, in 2015.

They are part of a portfolio that AerCap sold to Peregrine Aviation Co Ltd, an investment unit of NCB Capital, the brokerage arm of National Commercial Bank SJSC, in 2018.

According to the interim injunction, 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 later this month.

Tracking data from Flightradar24 showed only one of the two Boeing 777s covered by the court order is currently in Kuala Lumpur. The other was last recorded in Karachi last month. AerCap, which continued as part of the agreement to provide lease management services to Peregrine, declined to comment.

Malaysia Airports Holdings Berhad, the country's airport operator, and its subsidiary were ordered to make sure the aircraft do not leave Kuala Lumpur International Airport.

Malaysia’s Ministry of Transport said in a statement on Friday that the aircraft was being held pending legal proceedings set for Jan. 24.

With more than $4 billion in accumulated losses, PIA was already struggling financially when flights were grounded last year due to the pandemic.