Pakistan sells national carrier PIA for Rs 4,300 crore after competitive bidding

Pakistan on Tuesday finalised the privatisation of its national carrier, Pakistan International Airlines (PIA), marking a major milestone in the government’s efforts to exit the loss-making airline.

The deal, concluded after a competitive bidding process in Islamabad, saw PIA sold for Rs 4,300 crore.

The ceremony was attended by the three pre-qualified bidders: investment firm Arif Habib, Lucky Cement, and private airline Airblue. Each participant submitted sealed bids into a transparent box as part of the formal procedure.

Deputy Prime Minister and Foreign Minister Ishaq Dar praised the sale, saying, “Alhamdulillah, the successful privatisation of PIA marks a historic milestone. Congratulations to the Arif Habib Group on this achievement. This milestone reflects the vision of Prime Minister Shehbaz Sharif for reforming state enterprises, restoring PIA’s glory, and making air travel accessible and reliable for all Pakistanis and international travellers.”

Dar added, “I had the privilege of supporting this process through chairing the Cabinet Committee on Privatisation. I commend the Privatisation Commission for conducting a professional, transparent, and highly competitive process, and thank the Federal Government and Field Marshal Syed Asim Munir, for their full support in successfully concluding the transition.”

Competitive Bidding

In the second phase of bidding, Arif Habib emerged as the top contender with an initial offer of PKR 115 billion (around Rs 3,680 crore). Lucky Cement bid PKR 105.5 billion (Rs 3,376 crore), while Airblue placed PKR 26.5 billion (Rs 848 crore).

Following government rules, the two highest bidders—Arif Habib and Lucky Cement—entered an open auction. Bids were raised in stages until Arif Habib offered PKR 135 billion (approximately Rs 4,320 crore), a bid Lucky Cement did not match. “We congratulate Arif Habib group,” a Lucky Cement representative said after withdrawing.

Deal Structure

The privatisation initially covered a 75% stake in PIA. The successful bidder now has 90 days to purchase the remaining 25% shares. Of the funds from the 75% sale, 92.5% will be reinvested in the airline, with the remainder going to the government.

Additionally, the investor is required to commit PKR 80 billion (around Rs 2,560 crore) over the next five years to upgrade operations, fleet quality, and service standards.

To make PIA more attractive to buyers, the government assumed responsibility for its liabilities, which stood at PKR 654 billion (about Rs 20,928 crore) last year.

Transparency and Government Statements

The entire bidding process was broadcast live on local television channels to ensure openness and public trust. Prime Minister Shehbaz Sharif thanked officials and the Privatisation Commission, calling it “the largest transaction of its kind in Pakistan’s history” and praising the transparent manner in which it was conducted.

Background

Once among the world’s leading airlines, PIA has suffered years of mismanagement, rising losses, and declining service quality. Attempts to revive the carrier failed repeatedly, leaving the government with little choice but to privatise it.