By Staff Reporter
ISLAMABAD: The government pushed back against claims that it is arranging state-backed financing for Pakistan International Airlines’ purchase of Boeing Co. jets, with an adviser saying no sovereign guarantee or public loan has been offered for the newly privatized carrier’s fleet expansion.
Khurram Schehzad, adviser to Finance Minister Muhammad Aurangzeb, said in a post on X on Sunday that the government is “neither buying aircraft for a privatised PIA, nor has it announced any sovereign guarantee of taxpayer-funded loan for doing so.” The statement was aimed at countering social media claims that a minister was negotiating sovereign-linked financing for the jets on the government’s behalf.
The reports emerged after a meeting last week between Aurangzeb and John Jovanovich, chair of the US Export-Import Bank, held on the sidelines of the 81st United Nations General Assembly session in New York. According to finance ministry, the two discussed funding options for PIA’s aircraft purchase alongside the Reko Diq copper and gold project in Balochistan province.
Aurangzeb told Jovanovich that PIA was interested in Boeing’s 787 Dreamliner and asked for US Exim’s backing on a financing package that would cover both airframes and engines, the ministry said. The talks also touched on potential financing for aircraft pre-delivery payments and refinery upgrades, extending well beyond the airline alone.
Schehzad said the confusion stemmed from a misunderstanding of how export credit agencies operate. US Exim’s mandate, he said, mirrors that of similar institutions elsewhere: to support American exports and jobs by financing foreign purchases of US-made goods, including aircraft built by Boeing.
“US Exim’s own framework provides for asset-backed aircraft financing, where financing can be secured against the aircraft itself and credit assessed on the airline/lessee and/or guarantor, if any,” Schehzad wrote, adding that this structure means “a sovereign guarantee is therefore not an automatic requirement.”
He characterized Islamabad’s involvement as standard diplomatic support rather than financial exposure, saying the government was doing “exactly what governments around the world are expected to do for their businesses: opening doors, facilitating access to international financing, technology and suppliers and promoting investment and commercial opportunities.”
PIA was privatized in an auction completed in December, when a consortium led by Arif Habib Corp. acquired a 75% stake in the carrier for 135 billion rupees ($482 million). The consortium exercised a call option for the government’s remaining 25% stake earlier this year, taking full private ownership of the airline and removing the state from PIA’s shareholding entirely. The airline has separately pursued aggressive fleet growth plans, including a widely reported order for 16 Boeing 787 Dreamliners as part of a strategy to more than triple its aircraft count over the coming years.
Schehzad framed the episode as consistent with Pakistan’s broader economic strategy of shrinking the state’s footprint in commercial enterprises. “The government was deliberately reducing the state’s role in commercial activity, pursuing privatisation and creating greater space for private capital,” he said, adding that enabling private business is not the same as running it. “Private-sector-led growth does not mean government abandons the private sector; it means government enables it rather than running businesses itself.”
He specifically rejected characterizations that the arrangement amounted to a “public loan, hidden subsidy, state backstop,” or that taxpayers were being asked to assume PIA’s commercial risk. “The official statement refers to potential US Exim financing support; it does not announce government borrowing for PIA or a sovereign guarantee,” he said.
Schehzad added that the transfer of ownership through privatization did not preclude the government from continuing to support Pakistani companies in securing international financing. “Privatisation transfers ownership and commercial management,” he said. “It does not require the government of Pakistan to stop opening doors for Pakistani companies.”
The clarification comes as PIA works to rebuild its international network after years of financial strain and a European flight suspension that lasted nearly four years. The carrier’s new ownership has pushed Boeing to accelerate delivery timelines, with management seeking to bring forward the first batch of Dreamliners to early 2027 rather than the manufacturer’s initial 2028 target, according to people familiar with the discussions.
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