Pakistan to sell its loss making national flag carrier

Islamabad –  Pakistan has  successfully organised the privatisation process of Pakistan International Airlines (PIA), the national flag-carrier, selling it at Rs 135 billion to a consortium led by a local investment company.

After the bid had been opened, the government announced that the reference price was Rs 100 billion. Under the rules, the two highest bidders were offered the opportunity to compete in the opening auction process.

Both Arif Habib and Lucky Cement fiercely competed to win the airline and jacked up the offer money step by step until Arif Habib group offered Rs 135 billion, which went unchallenged.

According to the rules, 92.5 per cent of the sale proceeds from the sale of the initial 75 per cent shares of the PIA will be allocated to the airline for reinvestment, while the remaining 7.5 per cent will be transferred to the government.

The investor will also be required to commit an investment of Rs 80 billion over the next five years. Earlier, the government had taken responsibility for PIA's liabilities of Rs 654 billion last year, The Economic Times reported.
 

Earlier, Prime Minister Shehbaz Sharif, while addressing a meeting of the federal cabinet, thanked government officials and the Privatisation Commission for their role in the national carrier's privatisation.

He stressed that the process has been made "transparent", stating that it will be the "largest transaction" ever in Pakistan's history.
 

 PIA is expected to be run by a new owner from April 2026, subject to approvals, and receive fresh capital under a deal to privatise the flag carrier, Adviser to the Prime Minister on Privatisation Muhammad Ali said.

Muhammad Ali, the privatisation adviser to the prime minister, told Reuters in an online interview that the state expects a new owner to be running the airline by April.

The process now moves to final approvals by the Privatisation Commission board and the cabinet, expected within days, with contract signing likely within two weeks and financial close after a 90-day period to meet regulatory and legal conditions.

Ali said the government would receive about Rs10bn in cash up front and retain a 25pc stake valued at around Rs45billion.

The deal was structured to inject fresh capital into the airline rather than simply transfer ownership, he said.

“We did not want a situation where the government sells the airline, takes its money and the company still collapses,” Ali said.

The winning consortium also comprises fertiliser maker Fatima, private school network City Schools and real estate firm Lake City Holdings Limited.

Ali said Fauji Fertiliser Company did not bid but could still join the winning consortium as a partner, noting the buyer can add up to two partners including a consortium partner or a foreign airline if they meet the qualifying criteria.

Allowing partners adds financial strength and could bring global aviation expertise, he said.

PIA was once the leading airline in the world, but years of mismanagement sank its services and reputation.