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PIA Losses Reach Rs 850 Billion Amid Privatization Efforts
PIA's losses hit Rs 850 billion as the financial crisis deepens. With failed privatization attempts, the government plans to relaunch the auction amid international interest. Can the airline be revived?
ND
by News Desk
2025-02-11
PIA Losses Reach Rs 850 Billion Amid Privatization Efforts

Pakistan International Airlines (PIA), once a leading name in global aviation, has seen its financial losses surge to Rs 850 billion, according to recent reports. Despite several efforts, the government's attempt to auction the national airline failed, leading to further financial strain.

In a bid to privatize PIA, the government reportedly spent Rs 1 billion on auction preparations last year, only to receive a meager bid of Rs 10 billion against the expected starting bid of Rs 85 billion.

Rising Debt and Losses
PIA's debt increased by Rs 267 billion over the past five years, while it owes Rs 350 billion to domestic banks. Between September 2022 and June 2023 alone, the airline recorded losses of Rs 61 billion.

PIA's spokesperson Abdullah Hafeez Khan highlighted challenges such as employee pensions, the depreciation of the rupee, and the impact of COVID-19 as major contributors to the financial crisis.

Failed Privatization Attempts
The Pakistani government had hired Ernst & Young for the privatization process, paying $6.9 million — the highest fee for privatization services in the country's history. PIA's international and domestic assets, including the Roosevelt Hotel in New York and the Scribe Hotel in Paris, have faced continuous financial difficulties.

Operational and Staffing Issues
The airline currently operates with around 7,000 employees, equating to 250 staff per aircraft, a stark contrast to international airlines such as Qatar Airways and Turkish Airlines. The aging fleet of 22 aircraft adds additional maintenance costs of Rs 12 billion annually.

Long History of Accidents
PIA's turbulent past includes numerous tragic accidents, including the 2020 Karachi crash that claimed 91 passenger lives. The airline's reputation took a severe hit after former Federal Aviation Minister Ghulam Sarwar Khan's 2020 claims about pilots holding fake degrees, leading to a four-year European Union flight ban.

Future Prospects
With European restrictions lifted and IMF conditions eased, the government is optimistic about finding better buyers for PIA. However, aviation experts believe that the airline's golden opportunity for privatization was missed decades ago.

Despite its current financial turmoil, the government remains committed to reforming and reviving PIA, hoping for a turnaround that could restore its former glory.
Tagged:

Privatization

EconomicReform

PIACrisis
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