International Consortium Enters Bid for Controlling Stake in Pakistan International Airlines

An international consortium, including several prominent aviation groups, has entered the competition to acquire a majority stake in Pakistan International Airlines (PIA), as reported by Bloomberg and Pakistan’s News International. The consortium is led by Pak Ethanol Pvt, a Pakistani ethanol production and trading company within the Omni Group, and includes members such as Swiss Aviation Group AG, Airport Competence GmbH of Austria, Australia’s Pearl Asset Management PTY Limited, and local airlines Serene Air and AirSial.

This strategic alliance also involves Capital A Consultancy, the aviation consulting branch of Malaysia’s Capital A, and AsiaPak Investments Limited from Hong Kong. The consortium’s goal is to revitalize Pakistan’s aviation sector by integrating local expertise with international standards, aiming to transform PIA and boost the nation’s economy.

Currently, the Pakistani government owns approximately 96% of PIA and is looking to sell at least 51% of the airline’s shares while relinquishing management control. This move is part of an economic reform agenda pushed by the International Monetary Fund. The recently formed governing coalition, which assumed office on March 11, has pledged to proceed with these reforms.

The government has set a timeline to finalize the bidding for the controlling 51% stake by June 2024. The proceeds from this sale are designated primarily for addressing government-guaranteed debts, with PKR242 billion (approximately USD869 million) of PIA’s total liabilities of PKR629 billion (USD2.26 billion) planned to be transferred to a holding company managed by commercial banks.

Aside from the international consortium, ten Pakistani entities, including local airlines such as Fly Jinnah and AirBlue, have shown interest in acquiring a majority stake in PIA. Additionally, a group called Uprise Group, led by Tabassum “Tabz” Pardesi and previously associated with a crowdfunding attempt to revive South African Express, has submitted an expression of interest.

The deadline for submitting expressions of interest was recently extended from May 3 to May 17, with the prequalification of bidders expected to conclude by the end of May. The government aims to complete the sale process by mid-2024, marking a significant step in its ongoing privatization and economic reform efforts.