PIA spokesperson blames confusion during privatization process as reason for low bid
Pakistan International Airlines
(PIA) spokesperson Abdullah Hafeez Khan expressed disappointment over the
unexpectedly low bid for the national airline’s privatization, calling it
“unfortunate.”
In an appearance on Aaj News’ News Insight, Khan noted that
expectations were high, given PIA’s historic position as one of the world’s
oldest airlines. However, the low bid did not reflect its potential as a
profitable entity.
This setback followed the halting of the bidding process by the
Privatisation Commission, which received only Rs10 billion against an estimated
valuation of Rs85 billion for PIA. Pakistan’s government had sought to
privatize 51-100% of the debt-burdened airline to generate revenue and reform
its struggling state-owned enterprises as part of a $7 billion IMF program.
Read More PIA’s
privatization: Single bid of Rs. 10b ($36 million) received from a real estate
firm
Initially, six bidders were approved to participate, but five opted out. The
remaining bidders included Air Blue Limited, Arif Habib Corporation Limited,
Fly Jinnah, YB Holdings Private, Pak Ethanol Private, and Blue World City’s
Real Estate Consortium.
Khan explained that PIA’s restructuring into PIA Holding Company and PIA
Sales had relieved much of the airline’s longstanding debt burden, enabling it
to become a “clean company” with profitability at the operating level. He
emphasized the value of PIA’s assets, including the London Heathrow route,
estimated at $100 million, and a fleet of 33 aircraft. The 17 Airbus A320s, for
instance, are valued at $120-$150 million each, underscoring the airline’s
intrinsic worth.
Read More PIA’s
operational fleet shrinks to 16 aircraft for domestic and international flights
Khan noted that “confusion” during the process may have affected investors’
assessments. He also pointed out the absence of foreign participation, despite
outreach to several friendly countries. He explained, “The PIA is an
international entity requiring significant foreign investment, but investors
struggled to accurately evaluate its assets.”
Local investors expressed frustration over data inaccuracies from the
Privatization Commission, leading them to halt the process for three months for
a fresh audit. Ultimately, they withdrew, citing “uncertainty” around PIA’s
debt and international routes.
Read More Airline
management issues disrupt air travel in Pakistan
Khan underscored the need to restart the process from scratch, noting PIA’s
total asset value of Rs165 billion, with the 60% share of the airline set for
privatization valued at Rs99 billion. Only one bid was submitted, however,
which investors found insufficient even for a single aircraft’s value.
Source: AAJ
TV