By Staff Reporter
ISLAMABAD: The Competition Commission of Pakistan has approved the acquisition of the remaining 25% stake in Pakistan International Airlines by a consortium led by Arif Habib Corp., completing the full privatization of the national carrier and handing control to private investors less than four months after they bought a 75% holding.
The Phase I clearance, granted under the Competition Act 2010, marks the final regulatory green light from the competition authority for the transaction, which values the entire airline at 180 billion rupees. The deal is part of the government’s long-running effort to shed loss-making state assets and reduce the fiscal burden of keeping PIA afloat. The consortium — operating through PIA Equity Ltd. — already paid 135 billion rupees for its initial 75% stake in December 2025. Of that sum, 125 billion rupees is earmarked for reinvestment in the airline, with the government retaining 10 billion rupees. The buyers have now exercised their option to acquire the final 25% for about 45 billion rupees, backed by a bank guarantee. They have 12 months to complete payment, with interest accruing at 12% on the outstanding amount; the earlier they pay, the lower the interest cost.
Post-transaction shareholding breaks down as follows: Arif Habib Corp. and Fatima Fertilizer Co. together hold 34.1%, Fauji Fertilizer Co. Ltd. holds 33.9-34%, Lake City Holdings 14-16%, AKD Group 10.25%, and City Schools 7.65%, with the City Schools-AKD partnership accounting for the balance to reach 100%. The change of sponsors is scheduled for late April or early May, after which the new owners will install their own board and management team, ending government-appointed directors and operating PIA as a fully private entity.
The CCP described the aviation sector as competitive, with multiple domestic and international players active on key routes. It classified the deal as a conglomerate merger with no horizontal overlap or vertical foreclosure risks, concluding that the transaction would improve efficiency and service quality without harming competition.
The buyers have committed to injecting an additional 125 billion rupees to fund a turnaround, giving the new board room to restructure operations, rebrand the airline and raise fresh capital. PIA has been loss-making for years, accumulating more than $2.8 billion in red ink. Successive governments have struggled to fix chronic problems including mismanagement, political interference, overstaffing and heavy debt. The carrier was converted into a public limited company in 2016 and formally delisted from the Pakistan Stock Exchange in May 2024 after approval from the Securities and Exchange Commission of Pakistan. It became a wholly owned subsidiary of the newly created PIA Holding Co. Ltd., established in March 2024 specifically to manage the privatization.
The new owners’ immediate priorities include improving customer service, strengthening safety and security standards, enhancing staff performance and modernizing outdated ticketing systems. One early focus will be increasing frequencies on commercially viable routes. Routes that currently operate only two flights every two weeks could be expanded to as many as six flights a week, significantly improving passenger convenience.The airline currently operates 18 aircraft, some of which require capital expenditure to return to service. Six or seven more could be brought back online relatively quickly with additional investment. The medium-term target is to grow the fleet to 38 aircraft, with a longer-term goal of reaching 50 by September 2026 from 21 operational aircraft at present.
The consortium has received offers for 120 aircraft from around the world. Leasing brand-new planes is not feasible in the short term because manufacturer delivery slots are booked through 2030-2032. Instead, the airline will seek relatively modern aircraft — eight to 10 years old — from Boeing or Airbus to stabilize and expand operations quickly.
Once one of Asia’s most respected carriers when founded in 1955, PIA’s reputation was damaged by a 2020 pilot-licensing scandal that prompted flight bans by the European Union, Britain and the United States. Those bans were later lifted, offering a window for recovery. The new private owners hope that freedom from bureaucratic interference will allow them to restore the airline’s standing and reverse years of decline. The transaction remains subject to other regulatory approvals beyond the competition clearance. The CCP said it continues to back initiatives that promote market transparency and economic growth.
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