PIA negotiating $2b deals amid declining orders

LAHORE - In mid June, PIA entered into negotiations with Boeing and Airbus for procurement of 27 new aircrafts of worth more than $2 billion at list prices.
The deals could be one of the major narrow-body sales campaigns of 2009, and was revealed to Flight Daily News at the Paris Air Show by PIA Managing Director Capt Mohammed Aijaz Haroon.
It is worth mentioning here that the deal is being struck when there is recession worldwide, due to which, Boeing and Airbus have secured a grand total of just four new aircraft orders between them in the first three months of 2009.
The world’s airlines have ordered a total of just 50 aircrafts in the first quarter (28 for Boeing, 22 for Airbus), but they have cancelled 46 (32 for Boeing, 14 for Airbus), for a net order gain of just four aircraft. This is a massive turnaround from the 709 aircraft ordered in the first three months of 2008 (289 for Boeing and 420 for Airbus).
Speaking after signing a deal at the show with Thales for a RealitySeven Boeing 777-300ER full-flight simulator, Aijaz said the airline has completed the evaluation for the expansion of its fleet. “We’re looking at the Airbus A320 and Boeing 737. We’ve had meetings with Airbus and Boeing and are waiting for their final numbers. We expect to finalise a deal within the next few weeks.”
This PIA deal, if it goes through, will be the biggest purchase order by an airline in 2009, while the world’s aviation industry is facing its worst crisis since the great recession. Losses for 2009 are estimated to be in the range of $9 billion and this estimate is based on Brent Fuel prices of $56 per barrel. The Asia Pacific airlines are expected to account for one third of industry losses in 2009. The crisis has been further aggravated by the worldwide threat of terrorism, which coupled with economic recession, has dealt a severe blow to aviation industry. In such times, airlines have embarked on tightening belts, freeze on recruitments and aircraft induction, and adopted new marketing strategies, utilizing their best talents to retain their share of revenue, both passenger and cargo.