Pakistan International Airlines is likely to come under new ownership by April next year, with fresh money set to flow into the struggling national carrier as part of a long-awaited privatisation deal.
A consortium led by Arif Habib Corporation emerged as the highest bidder in a live televised auction on Tuesday, offering Rs135 billion for a 75 percent stake in PIA. The bid cleared the government’s reserve price of Rs100 billion and marked a sharp turnaround from last year, when an earlier attempt to sell the airline failed to attract acceptable offers.
Fresh capital, not just a sale
Muhammad Ali, the prime minister’s adviser on privatisation, said the goal of the transaction was to revive the airline rather than simply transfer ownership. He said the structure of the deal was designed to bring new capital into PIA, helping it stabilise operations after years of losses.
The government is expected to receive around Rs10 billion in cash upfront, while retaining a 25 percent stake valued at about Rs45 billion. Ali said this would ensure the state remains invested in the airline’s future while shifting day-to-day control to a private owner.
The winning group includes fertiliser manufacturer Fatima, private education network City Schools and real estate firm Lake City Holdings Limited. Ali said the consortium would also be allowed to bring in up to two additional partners, including a foreign airline, provided they meet the required criteria. Such partners could add financial strength and international aviation expertise.
Approvals and timeline
The deal now moves to final approvals from the Privatisation Commission board and federal cabinet, which are expected within days. Contract signing is likely within two weeks, followed by a 90-day period to complete regulatory and legal requirements. If all goes as planned, a new owner is expected to be running PIA by April.
Ali said safeguards were built into the process. These include retained earnest money and an additional payment at signing, allowing the government to move to the second-highest bidder if the transaction fails to close.
On labour issues, the buyer will be required to retain all existing employees for at least 12 months after the sale, with contracts remaining unchanged. PIA’s workforce has already reduced in recent years, easing some pressure on costs.
The privatisation is being closely watched by IMF, which has repeatedly asked Pakistan to curb losses at state-owned enterprises.
