ISLAMABAD (MNN); Pakistan International Airlines (PIA) is expected to come under the management of a new owner from April next year, subject to regulatory approvals, as part of a privatisation deal aimed at injecting fresh capital into the national flag carrier, Adviser to the Prime Minister on Privatisation Muhammad Ali said on Wednesday.
A consortium led by Arif Habib Corporation emerged as the highest bidder in a live-televised auction on Tuesday, offering Rs135 billion for a 75 percent stake in PIA. The bid exceeded the governmentās reserve price of Rs100 billion and marked a major breakthrough after last yearās unsuccessful attempt to privatise the airline.
Speaking to Reuters, Muhammad Ali said the privatisation process had now entered the approval stage, with final clearances from the Privatisation Commission board and the federal cabinet expected within days. He added that the contract could be signed within two weeks, followed by a 90-day period to meet legal and regulatory requirements before financial closure.
Under the deal, the government will receive around Rs10 billion in upfront cash while retaining a 25 percent shareholding valued at approximately Rs45 billion. Ali said the transaction was designed to strengthen the airline financially rather than merely transfer ownership.
He said the winning consortium includes fertiliser producer Fatima, private education network City Schools, and real estate firm Lake City Holdings Limited. He added that while Fauji Fertiliser Company did not participate in the bidding, it could still join the consortium as a partner, along with up to two additional partners, including a foreign airline, provided they meet eligibility criteria.
Ali said allowing new partners would enhance financial capacity and could bring international aviation expertise to PIA.
On labour matters, he said the buyer would be required to retain all employees for at least 12 months after the transaction, with no changes to existing contracts. He noted that PIAās workforce had already been significantly reduced over recent years.
The privatisation is being closely monitored by the International Monetary Fund, which has urged Pakistan to curb losses at state-owned enterprises. Ali said the PIA deal was a crucial test of Pakistanās reform commitments, warning that failure to privatise loss-making entities could place renewed strain on public finances.
Addressing a separate press briefing in Islamabad, Ali said the strategic sale of PIA had been under consideration for nearly two decades, with multiple unsuccessful attempts in the past, including one last year.
He said the latest successful bid was the result of six months of sustained efforts, due diligence and coordination among stakeholders, carried out under the guidance of Prime Minister Shehbaz Sharif, the federal cabinet, Deputy Prime Minister Ishaq Dar and Chief of Defence Forces Field Marshal Asim Munir.
Ali recalled that PIA once operated around 50 aircraft nearly five decades ago, a number that should have doubled by now, but the airline was currently flying only 18 planes due to years of mismanagement.
He said the private sector was better suited to run commercial enterprises, adding that government ownership had failed to deliver sustainable results. He expressed confidence that private investment would lead to fleet expansion, aircraft refurbishment and improved service quality.
Responding to criticism that the government would receive only Rs10 billion from the deal, Ali clarified that while 7.5 percent of the bid amount would go directly to the government, the remaining 92.5 percent would be reinvested into PIA. He said the overall value accruing to the state amounted to approximately Rs55 billion.
