PIA's auction delayed till end of September
The Government of Pakistan has postponed the final auction of Pakistan International Airlines (PIA) by two months, moving it to the end of September. This delay comes as potential bidders have requested additional information to better evaluate the airline, according to Bloomberg.
Bidders are awaiting the latest
audited financial statements from PIA, as well as details on the current
restrictions, such as the ongoing ban on flights to Europe. There is also a
demand for clarity regarding aircraft lease agreements.
The privatization of PIA and the
outsourcing of operations at three major airports are key components of the
government’s strategy to reduce financial losses and boost foreign exchange
reserves amid Pakistan’s $350 billion economy facing a balance of payments
crisis.
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This move aligns with recommendations from the International Monetary Fund (IMF), which recently granted Pakistan a $7 billion loan.
However, due to the request for more
detailed information from potential buyers, the auction has been pushed back.
The European Union Aviation Safety Agency (EASA) had previously banned PIA from
operating in Europe and Britain after a tragic plane crash in Karachi in 2020
and a subsequent pilot licensing scandal. This ban has significantly affected
PIA's revenue, costing the airline approximately 40 billion rupees annually.
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The government is contemplating
selling between 51% and 100% of PIA, which has not been profitable for nearly
two decades. Six bidders, including prominent local business conglomerates and
individual investors, have been shortlisted for the auction.
Once a prominent carrier in the
1960s and 1970s, PIA has struggled with financial losses, mismanagement, and
corruption allegations in recent years. Given the current economic challenges,
the administration has prioritized PIA’s privatization as part of its broader
efforts to comply with IMF directives and stabilize the national economy.
Source: Profit Pakistan