Pakistan sets a date for selling 75% of the debt-laden national airline
The Pakistani government announced today, Wednesday, its intention to put 75% of the national airline, Pakistan International Airlines, for sale, while retaining its name and brand, adding that the bidding process will begin on December 23, while the remaining 25% will be offered within a month.
This decision represents Islamabad’s strongest efforts in decades to reform the Aviationis burdened with debt, has accumulated losses exceeding $2.5 billion, and has become a heavy burden on the state budget.
It has suffered Pakistan International Airlines, which was once one of the most prominent airlines in Asia, has suffered from chronic mismanagement, political interference, a swelling staff, accumulated debts, and operational problems that led to its flights to the European Union and the United Kingdom being banned in 2020, following a scandal related to pilot licensing.
Privatization of the airline is also a prerequisite for the $7 billion International Monetary Fund, which Pakistan approved last year.
Under the privatization plan, the number of airworthy aircraft in PIA’s fleet will rise from 18 to 38 by 2029.
Four investment groups qualified for the deal last July, including a private Pakistani airline.
Under the new terms, the winning bidder will pay Just 7.5% of the bid amount is in cash, with the remaining 92.5% to be reinvested directly into the airline for its revival.
PIA has relied on government bailouts for decades, with repeated attempts to privatize it failing due to union resistance, legal challenges and lack of investor interest.
A deal also fell through late last year after a potential buyer offered just $36 million for a 60% stake, far below the asking price of about $303 million.
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