Pakistan International Airlines (PIA) officially entered a new phase on Monday as management control of the national carrier was handed over to a consortium led by Arif Habib Corporation, marking the completion of the first financial close under the airline’s privatisation deal.
The handover follows the fulfilment of all conditions outlined in the Share Purchase and Subscription Agreement (SPSA), allowing the new owners to begin work on reviving the airline after years of financial struggles.
The Privatisation Commission described the development as the successful completion of the first financial close of PIA’s privatisation, calling it the country’s largest privatisation transaction to date. Officials said the deal reflects Pakistan’s ability to complete complex transactions through a transparent, competitive and professionally managed process.
Fresh investment to modernise airline
The consortium has committed a total investment of Rs180 billion under the agreement. This includes Rs125 billion in fresh capital for PIA’s transformation and Rs55 billion to be paid to the federal government for acquiring a 75 percent stake in the airline.
As part of Monday’s first closing, the consortium paid Rs10 billion to the government and injected Rs80 billion into the airline. The fresh capital will be used to strengthen PIA’s finances, expand and modernise its fleet, improve operations, add new routes and raise customer service standards.
In a statement shared on social media, PIA said the airline had officially transitioned to its new management under PIA Equity Ltd, a special purpose vehicle established by the Arif Habib-led consortium.
The airline said the fresh capital would fully recapitalise PIA and support a broad modernisation programme aimed at improving services while preserving the airline’s long history.
Chairman of PIA Equity Ltd said earning public confidence would be the new management’s biggest responsibility.
“The trust of a nation isn’t simply transferred on a document. Trust is earned, mile by mile, smile by smile, year by year. We know this. And we accept the challenge wholeheartedly,” the chairman said.
Long road to privatisation
PIA had accumulated losses of more than $2.8 billion over the years before the government completed its privatisation in December 2025 through a competitive bidding process. The transaction valued the airline at Rs180 billion.
The government said it completed several difficult requirements before Monday’s handover, including regulatory approvals, aviation policy reforms, aircraft financing arrangements, tax restructuring, governance changes and obtaining approvals from aircraft lessors and commercial partners.
Adviser to the Prime Minister on Privatisation Muhammad Ali said the transaction highlighted Pakistan’s commitment to economic reforms, fiscal discipline and greater private sector participation while helping strengthen investor confidence.
The second financial close is expected within the next 12 months. Under the agreement, the consortium will inject another Rs45 billion into PIA and has also exercised its option to purchase the remaining 25 percent shareholding for an additional Rs45 billion.
The Privatisation Commission said the government remains committed to protecting the interests of employees, passengers and consumers, adding that airline operations will continue without disruption under the country’s existing aviation laws and regulatory oversight.
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