Pakistan’s PIA Stake Sale Set for October 30
The Pakistani government is poised to move forward with the sale of a majority stake in Pakistan International Airlines (PIA) this week, with the auction date set for October 30, 2024. This decision follows a deferral in September, when the government postponed the auction due to bidder concerns regarding specific sale conditions. As the end of October approaches, the auction remains on schedule, offering a critical opportunity for stakeholders interested in acquiring a 60% stake in the national carrier.
Six entities have pre-qualified to bid on the majority stake in PIA. Among the bidders are Fly Jinnah, AirBlue, Arif Habib Corporation, and three consortia led by YB Holdings (Private) Limited, Pak Ethanol, and Blue World City. According to reports from ch-aviation, the bidders had raised several issues related to the sale conditions, including the requirement to retain PIA’s workforce of over 7,300 employees for a minimum of two years and to fulfill obligations to the country’s pension and benefits regime.
Additionally, bidders expressed the need for a one-year warranty covering 18 aircraft and sought protection against ongoing litigation affecting PIA. The warranties pertain to the aircraft’s condition, accuracy of record-keeping, and the provision of information regarding parts and maintenance history. In response to these concerns, a government spokesperson indicated that discussions were ongoing to address the bidders’ issues.
In recent statements, Parliamentary Secretary for Communications Gul Asghar assured the parliament that the PIA auction would proceed as scheduled on October 30. This announcement has been welcomed by the stakeholders involved, highlighting the government’s commitment to the privatization process amid ongoing challenges facing PIA.
Compounding the airline’s difficulties, reports indicate that PIA has been struggling with a number of grounded aircraft, with ten planes remaining out of service for over a year. The grounding of these aircraft is attributed to delays in acquiring necessary spare parts and the lack of timely engine inspections, which have been linked to mismanagement and poor planning within the airline’s operational framework.
As detailed in the ch-aviation fleets module, a total of 16 out of PIA’s 32 aircraft are currently grounded for various reasons. This includes seven of the airline’s seventeen A320-200s, two of its three ATR42-500s, three of six Boeing 777-200ERs, one of two Boeing 777-200LRs, and three of four Boeing 777-300ERs. The grounding has led to frequent cancellations of scheduled flights, significantly impacting PIA’s operational capacity.
Despite these challenges, PIA plans to utilize one of its operational Boeing 777-200 aircraft to launch a new weekly roundtrip service between Islamabad and Beijing Capital, starting early next month. This move reflects the airline’s efforts to maintain international connectivity even as it navigates its internal challenges.
In addition to the ongoing privatization of PIA, the sale of Islamabad International Airport is scheduled for November, further underscoring the government’s broader privatization agenda aimed at revitalizing the country’s aviation sector. As the auction approaches, the future of PIA hangs in the balance, with potential implications for the airline’s financial stability and operational viability.
Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com