PIA boss detained in Pakistan over SriLankan lease deal

Bernd Hildenbrand, the interim CEO of PIA - Pakistan International Airlines, has been placed on an Exit Control List (ECL), according to sources quoted in Pakistan’s The News. 

Deputy Director of the Federal Investigation Agency (FIA), Khawaja Hammadur Rehman, issued the notification on March 15.

The FIA is investigating Hildenbrand and other PIA executives over alleged kickbacks, embezzlement and mismanagement in the lease of aircraft, namely A330-300 - 4R-ALN (cn 1604) from SriLankan Airlines. 

The wet-leased A330 was recently returned, after a six-month contract. SriLankan Airlines CEO Captain Suren Ratwatte has said the deal was the most profitable one the airline had made in recent history. 

PIA reportedly paid USD19 million for the six month deal. The aircraft was deployed on the Premier London Heathrow-Islamabad service, which allegedly lost PKR1.5 billion (USD14.3 million) over the course of its operation.

A Senate panel recently released an enquiry into PIA’s finances and management, finding that corruption was a problem in all areas of business. “Corruption is rampant in purchase of spares parts, allocating of space for freight, purchase of tickets, in enrolments and postings and in catering and engineering departments,” the report says. 

It recommends the immediate dissolution of the Board of Directors, and the appointment of a permanent CEO.

The Airbus-330 was acquired on lease for premier service of PIA. The PIA has paid over $19 million to Sri Lankan authorities in terms of wet lease for this aircraft during span of six months. 

Stats revealed every flying-hour of Airbus-330 cost PIA over 8,000 dollars. Seat and load plan for London-bound flights did not work according to the plan.  

PIA Spokesperson Danyal Gilani articulated that the aircraft was acquired at market rate. 

In August 2016, the PIA had acquired three A-330s from Sri Lanka on wet lease in a bid to revive glorious past of the national flag career.

The decision to put Mr Hildenbrand on ECL came after the National Assembly was told that Pakistan International Airlines (PIA) had suffered losses of about Rs. 180 crores on a premium service on the domestic route and also in connection with the airlines acquiring a plane from Sri Lankan Airlines at an exorbitant price than the prevailing market rate.

Apparently the airlines acquired a plane from Sri Lankan Airlines at $8,000 per hour, while another airline had acquired the same type of plane at USD 4,000 per hour.

PIA has already invited applications for a new CEO and chief operating commercial officer or director marketing through a tender. 

Hildenbrand was also barred from leaving the country in December 2016 after a controversy erupted when the national airlines sold a flight-worthy aircraft (A—310) to a German museum at throwaway price.

Interestingly, although Hildenbrand has been working in the high-profile post since 2015 he has yet to be given security clearance by the country’s security agencies.

Mr. Hildenbrand is presently in Karachi.

-Agencies