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Govt’s First Failed PIA Privatisation Attempt Cost $4.3M
Pakistan’s first failed attempt to privatise PIA cost $4.3M. Now, the govt moves ahead with plans to sell 51–100% shares by May after airline posts rare profit.
ND
by News Desk
2025-04-17
Govt’s First Failed PIA Privatisation Attempt Cost $4.3M

ISLAMABAD – The government’s initial attempt to privatise Pakistan International Airlines (PIA) has come at a steep cost, with a loss of $4.3 million to the national exchequer, the National Assembly Standing Committee on Privatisation was informed on February 26.

Despite the setback, the government is pushing ahead with renewed vigour. Privatisation and Investment Minister Abdul Aleem Khan has confirmed that the administration is determined to finalise all steps for PIA’s privatisation by May. The Privatisation Commission has now approved a fresh transaction structure, proposing the sale of between 51 to 100 percent of the national carrier’s shares.

A meeting chaired by Muhammad Ali, the Adviser to the Prime Minister on Privatisation and Chairman of the Privatisation Commission, approved the pre-qualification criteria for selecting potential bidders for this renewed process. A fresh expression of interest (EOI) is expected to be advertised next week, aiming to attract interest in acquiring the majority shares of Pakistan International Airlines Corporation Limited (PIACL).

“The Board approved the pre-qualification criteria for selection of potential bidders for privatisation of 51pc to 100pc shares of PIACL,” the ministry's statement confirmed, adding that discussions will continue to finalise additional agenda items.

Despite its troubled financial history, PIA’s recent performance has given the government a renewed sense of optimism. Earlier this month, a PIA spokesperson announced that the airline recorded a net profit in 2024 for the first time in 21 years. According to financial results, the airline earned an operational profit of Rs3.9 billion and a net profit of Rs2.26 billion, with an operating margin exceeding 12% — placing it on par with some of the best-performing airlines globally.

PIA had been in a steady decline since 2011, burdened by growing debt and persistent losses that necessitated multiple government bailouts. By the end of 2016, the airline’s debt stood at $3 billion, increasing to $3.3 billion by the end of 2018.

In June 2023, the government, under an agreement with the International Monetary Fund (IMF) for a $3 billion bailout, committed to overhauling loss-making state-owned enterprises, including PIA. However, efforts to privatise the airline were temporarily stalled in February 2024 when the Election Commission instructed the caretaker government to refrain from finalising the deal ahead of the general elections.

Now, with a new administration in place and the airline showing signs of a turnaround, the government hopes to move swiftly with its divestment strategy. Analysts suggest that the successful privatisation of PIA could become a milestone in Pakistan’s broader economic reform agenda, helping reduce the burden of inefficient state-run enterprises and attracting much-needed foreign investment.
Tagged:

PakistanEconomy

PIAPrivatisation

SOEsReform
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