National flag carrier Pakistan International Airlines (PIA) is expected to be run by a new owner from April 2026. It will also receive new capital under a deal to privatize the airline, the country’s privatization chief said on Wednesday.
A consortium led by Arif Habib Corporation emerged as the top bidder on Tuesday in a live televised auction for a 75% stake in PIA. This marks a breakthrough for the government’s long-delayed privatization of the airline.
The consortium offered Rs135 billion, exceeding the government’s reserve price of Rs100 billion – a turnaround from last year’s failed sales attempt.
Read: The government finally cuts ‘white elephant’ PIA loose
Adviser to the prime minister on privatization, Muhammad Ali, told Reuters in an online interview that the state expects a new owner to run the airline by April next year. The process moves to final approvals by the Privatization Commission’s board and cabinet expected within days, with contract signing likely within two weeks.
Financial closure is also expected after 90 days to satisfy regulatory and legal conditions.
Ali said the government would receive Rs 10 billion in cash upfront, with a 25% stake worth about Rs 45 billion. The deal was structured to inject fresh capital into the airline rather than simply transfer ownership, he said.
“We didn’t want a situation where the government sells the airline, takes its money and the company still collapses,” Ali said. The winning consortium also includes fertilizer producer Fatima, private school network City School and real estate firm Lake City Holdings Limited.
Ali said Fauji Fertilizer Company, a military-run conglomerate, did not bid but could still join the winning consortium as a partner, noting that the buyer can add up to two partners – including a consortium partner or a foreign airline – if they meet the qualifying criteria.
Allowing partners adds financial strength and can bring global aviation expertise, he said.
IMF pressure
Ali said safeguards, including retained earnest money and an extra payment at signing, would allow the government to move to the next highest bidder if the deal fails.
On manpower, he said the buyer must retain all employees for 12 months after the transaction, with unchanged contracts, adding that the PIA workforce has already shrunk in recent years.
The sale is closely monitored by the International Monetary Fund (IMF), which has pressured Pakistan to stop losses at state-owned enterprises. Ali described the privatization as a key test of Pakistan’s reform credibility with the IMF, adding that failure to bail out loss-making state enterprises risked renewed pressure on public finances.
He said closing the deal would signal progress in reforms and privatizations, adding that the government was working through a pipeline of future transactions once PIA closes.
