Pakistan Revives PIA Privatisation Amid Debt Relief Efforts

Pakistan is set to relaunch its privatisation drive for PIA – Pakistan International Airlines (PK, Islamabad International), marking the second attempt in less than a year to sell a majority stake in the carrier.

According to The News International, Privatisation Committee Secretary Usman Bajwa briefed the National Assembly Standing Committee on February 3, stating that the government is fully prepared for another attempt to sell PIA.

A previous auction in October 2024 failed, receiving just one bid of PKR10 billion (USD36 million), significantly below the PKR85 billion (USD305 million) reserve price. Although the government transferred most of PIA’s debts to a newly created holding company, PKR45 billion (USD161 million) in liabilities remain on the airline’s balance sheet, deterring potential investors.

To improve PIA’s sale prospects, the government plans to remove the remaining debt from its books. Additionally, Pakistan has secured an agreement with the International Monetary Fund (IMF) to waive an 18% general sales tax (GST) on aircraft purchases. Since Pakistan is under an IMF bailout, the fund influences tax policy changes.

The new PIA buyer must commit to renewing the airline’s ageing fleet, initially adding 15 to 20 aircraft. The GST exemption will also benefit other Pakistani airlines, supporting fleet modernization and industry growth.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com