Pakistan Privatises PIA for Rs 4,300 Crore After Competitive Bidding

Pakistan has completed the long-awaited privatisation of its national carrier, Pakistan International Airlines, selling the loss-making airline for Rs 4,300 crore after a competitive bidding process held in Islamabad.

The sale marks a significant move by the government to exit an airline burdened by years of mounting losses, operational inefficiencies, and failed turnaround attempts. The privatisation ceremony was attended by all three pre-qualified bidders—Arif Habib Group, Lucky Cement, and Airblue—with bids submitted through a sealed and transparent process.

When bids were opened, the Arif Habib Group emerged as the highest bidder with an initial offer of PKR 115 billion. Lucky Cement followed closely with PKR 105.5 billion, while Airblue submitted a substantially lower bid. After the government announced a reference price of PKR 100 billion, the two top bidders entered an open auction phase.

Following several rounds of competitive bidding, the Arif Habib Group raised its offer to PKR 135 billion, equivalent to about Rs 4,320 crore, a bid that Lucky Cement declined to match. The Arif Habib Group was subsequently declared the successful bidder.

The government had initially offered a 75 per cent stake in PIA, with the remaining 25 per cent to be acquired by the winning bidder within 90 days. Under the deal structure, 92.5 per cent of the proceeds from the initial sale will be reinvested into the airline, while the remaining 7.5 per cent will go to the government.

In addition to the purchase price, the new owner will be required to invest PKR 80 billion over the next five years to improve fleet quality, operational efficiency, and passenger services. The government had earlier assumed responsibility for PIA’s liabilities—estimated at PKR 654 billion—a move seen as critical in attracting bidders.

Deputy Prime Minister and Foreign Minister Ishaq Dar described the privatisation as a historic milestone aligned with the reform agenda of Prime Minister Shehbaz Sharif, praising the Privatisation Commission for conducting a transparent and competitive process.

The entire bidding exercise was broadcast live on television to ensure transparency and public confidence. This was Pakistan’s second attempt to sell the airline, after an earlier effort failed due to inadequate bids.

Once considered among the world’s leading carriers, Pakistan International Airlines has struggled in recent decades due to mismanagement, financial losses, and deteriorating service standards. The government said privatisation was necessary to restore the airline’s competitiveness and financial sustainability.