DUBAI (Khaleej Times) -- Pakistan International Airlines (PIA) has agreed to lease seven new Airbus A320-200 aircraft from Kuwait's Aviation Lease and Finance Company (ALAFCO).

In a press statement, Pakistan's national carrier said it had signed a letter of intent (LOI) with the Kuwaiti company, however, the airline did not say how much the deal is worth.
The aircraft will replace PIA's ageing Boeing 737-300 fleet, which has served the airline for more than 20 years, PIA said in a statement.
The deliveries of the A320 are expected to commence in 2009 and will be completed in the same year.
The deal comes as PIA tries to stem financial losses and recover from a ban in March on most of its aircraft from flying to the European Union on safety concerns.
The ban was lifted in June for specific 747 and A310. PIA also plans to replace other aircraft, including A310 and 747.
ALAFCO is a Kuwaiti company that provides Shariah-based aircraft leasing products with a portfolio of 33 owned and managed aircraft on lease to 16 airlines in 11 countries. They have recently placed orders for 59 new aircraft with Airbus and Boeing.
“Induction of these aircraft is part of PIA's drive to modernize its fleet with newer and more fuel-efficient airliners to provide its customers with state-of-the-art technology airplanes with in-flight comfort,” a top official of the airline said.
Chairman PIA Zaffar Ahmad Khan said that a comprehensive study was carried out, and based on technical and operational evaluation of the available options, Airbus A320-200 was selected as the most suitable choice for PIA.
“The new A320 aircraft will provide maximum operational flexibility on short and medium haul routes with lower operating costs, optimized cabin layouts and better baggage/cargo handling,” he said.
“These aircraft with a seating capacity of 146 will operate mainly on domestic routes with limited operation on regional routes. With the induction of these seven new aircraft, the average age of PIA fleet will be reduced from the current 13 years to around 10 years,” the airline said.
PIA has recently acquired seven new ATR42-500 aircraft as replacement of its Fokker F-27 fleet. PIA's fleet also includes eight state-of-the-art Boeing 777 aircraft that are being utilized on long haul routes