Pakistan Moves to Sell Up to 100% of Pakistan International Airlines
Pakistan’s government has agreed in principle to fully divest its stake in Pakistan International Airlines, responding to demands from prospective buyers seeking full control of the loss-making national carrier to streamline governance and decision-making.
Under the revised privatisation plan, 75% of PIA’s shares will be offered through an auction scheduled for December 23. Bidders will also be given the option to acquire the remaining 25% at a premium, effectively allowing the sale of up to 100% of the airline, privatisation adviser Muhammad Ali told Bloomberg. According to the report, several bidders had pushed for a complete government exit as a condition for participation.
Ali said the reserve price will be determined on the day of the auction, adding that the government is confident its valuation expectations “will be met.” The final structure is designed to balance attracting investors with protecting taxpayer interests after years of financial support for the carrier.
Local newspaper Express Tribune reported that the remaining 25% stake would be offered exclusively to the winning bidder at a 12% premium to the auction price. The buyer would have up to one year to complete payment for that additional stake, providing flexibility while securing the state’s exit at a higher valuation.
In a further concession aimed at boosting investor appeal, the government has agreed to receive only 7.5% of the winning bid in cash. The remaining 92.5% would be reinvested directly into PIA by the new owner rather than being paid into the national exchequer. The move is intended to strengthen the airline’s balance sheet and fund operational recovery rather than diverting proceeds to the state budget.
Pakistan’s Privatisation Commission confirmed in November that the auction would proceed on December 23 after multiple delays. Four bidding consortia are understood to be in the race, a marked improvement on a previous privatisation attempt in 2024 that attracted just a single, heavily discounted offer.
The renewed sale effort is a key condition of a USD3 billion bailout package agreed with the International Monetary Fund, which has pressed Islamabad to reform or privatise state-owned enterprises that are a persistent drain on public finances.
In preparation for the auction, the government has taken steps to remove obstacles that previously deterred investors. These measures include settling portions of PIA’s legacy debt, waiving general sales tax on new aircraft acquisitions, and releasing funds to clear overdue pension liabilities for former employees.
PIA has long struggled with high costs, an ageing fleet, and weak governance, but officials argue that full privatisation offers the best chance of restoring competitiveness. If successful, the sale would mark one of the most significant aviation privatisations in the region and bring to an end decades of state control over Pakistan’s flag carrier.
Related News: https://airguide.info/category/air-travel-business/airline-finance/
Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com