By Staff Reporter
ISLAMABAD: Pakistan is accelerating plans to sell the operational assets of its struggling national carrier, Pakistan International Airlines Co. (PIA), targeting completion by the last quarter of 2025, a parliamentary panel was told on Monday.
Four pre-qualified parties will begin buy-side due diligence on Tuesday, a 60- to 90-day process that marks a critical step in the government’s push to offload loss-making state enterprises and bolster its fiscal position.
The privatization of PIA, long plagued by debt and inefficiency, is a cornerstone of Islamabad’s broader economic reform agenda under Prime Minister Shehbaz Sharif and a key IMF demand to stabilise an economy buckling under $130 billion in external debt.
A consortium of industrial heavyweights, Lucky Cement, Hub Power Holdings, Kohat Cement, and Metro Ventures, is qualified to bid for a 51-100 percent stake in PIA. Another contender is a group led by investment firm Arif Habib Corp, joined by fertilizer maker Fatima Fertiliser, private education provider The City School, and real estate developer Lake City Holdings. Fauji Fertiliser Company, a military-linked conglomerate, and domestic airline Airblue round out the approved bidders.
Privatisation Commission Secretary Usman Akhtar Bajwa briefed the National Assembly’s Standing Committee on Privatisation, chaired by Muhammad Farooq Sattar, on the latest developments. The four shortlisted bidders, cleared after five parties submitted expressions of interest, gained access to PIA’s financial accounts and operational data starting Tuesday.
Budget airline Fly Jinnah, backed by Air Arabia, opted out, citing its focus on low-cost operations rather than managing an international carrier like PIA.
“These are groups with the capital to revamp operations,” Bajwa told committee members, emphasizing transparency and competitiveness. “The process (due diligence) will be completed in 60 to 90 days, depending on the potential buyers.”
The base price for PIA’s operational assets remains undecided. “It will be determined near the bidding date, depending on interest and the transactional structure advised by our financial advisors,” Bajwa said.
The government has mandated that the winning bidder expand PIA’s fleet from its current 19 aircraft to at least 45, signaling expectations for a significant operational overhaul.
Job security for PIA’s 6,700 remaining employees dominated discussions at the meeting. Committee Chairman Sattar pressed the government to extend the post-privatization retention period to three to four years, up from the 18 months negotiated in the last bidding round.
“The well-being of the employees must remain a priority,” Sattar said, urging that their protection be a non-negotiable condition of the sale.
The airline has trimmed its workforce from 11,000 to 6,700 employees. Still, Bajwa acknowledged that PIA still carries 20% to 25% surplus staff but argued that expansion by the new owners would necessitate additional hiring. “The commission will ensure retention of employees through negotiation with the potential buyers,” he assured lawmakers, noting that employee safeguards are being woven into the deal terms.
PIA’s leadership highlighted recent progress to bolster its appeal to investors. Air Vice Marshal (retired) Muhammad Amir Hayat, the airline’s CEO, told the committee that flights to France have resumed, with services to Manchester, U.K., set to follow soon. “PIA’s operational performance has improved considerably compared to last year,” he said, though financial specifics were not disclosed. The airline has also forged joint operations with Turkish Airlines and Ethiopian Airlines, further strengthening its network.
Once a jewel of Asian aviation, the carrier has become a symbol of the fiscal strain inflicted by Pakistan’s state-owned enterprises. The airline, 96 percent owned by the state through PIA Holding Company Limited, has racked up over $2.5 billion in losses over the past decade, battered by mismanagement, and operational woes.
Yet glimmers of a turnaround have emerged. In the fiscal year ending June 2024, PIA posted its first operating profit in 21 years, a feat driven by a sweeping restructuring effort. A prior attempt to sell PIA faltered when a $36 million offer from Blue World City undershot the $305 million floor price for a 60% stake, tripped up by debt concerns and limited control.
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