PIA employees become stakeholders in auction of national carrier
Employees of Pakistan International Airlines
(PIA) have submitted a joint bid to acquire the national flag carrier, adding
to the growing list of interested buyers ahead of the June 19 deadline,
according to The News, citing officials
from the Privatization Commission.
The offer was filed jointly by Hidayatullah
Khan, President of the CBA-affiliated People’s Unity, and Aqeel Siddiqui, head
of the PIA Senior Staff Association (SASA). The employee representatives
contend that they should be granted the first right to purchase the airline,
which the federal government is attempting to privatize after a previously
failed effort.
In parallel with the employees’ bid, Fauji
Fertilizer Company Limited (FFC), one of Pakistan’s largest fertilizer
producers, submitted its own Expression of Interest (EoI) on June 16. FFC
confirmed it also provided the necessary prequalification documentation to the
Privatization Commission.
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This wave of interest follows the government’s
renewed push to divest between 51% and 100% of its stake in PIA, in line with a
broader $7 billion IMF-supported reform initiative aimed at stabilizing public
finances.
Initially, the deadline to submit Expressions
of Interest was June 3, 2025. However, the government extended it to 4:00 PM on
June 19, 2025, allowing additional time for both domestic and international
investors to participate. All other terms and conditions remain unchanged.
According to the public notice, each EoI must
be submitted with a non-refundable processing fee of $5,000 or Rs1.4 million.
Consortia need only one member to pay the fee. Eligible bidders may include
companies, firms, or corporate entities acting individually or in groups.
The government currently owns approximately
96% of PIA’s equity through PIA Holding Company Limited (PHCL). A previous
privatisation attempt in 2024 failed after receiving a single offer—Rs10
billion for a 60% stake—from the Blue World City consortium. That bid was
significantly below the commission’s benchmark valuation of Rs85.03 billion and
was ultimately rejected due to valuation concerns and lack of investor
confidence.
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To improve the airline’s investment appeal,
the government implemented a major restructuring plan. On May 3, 2024, the
Securities and Exchange Commission of Pakistan (SECP) approved a Scheme of
Arrangement (SOA), splitting the airline into two entities: PIA and PIA Holding
Company Limited (PIA Holdco).
Under this structure, core aviation
services—passenger and cargo transport, engineering, flight training, ground
handling, and catering—remained with PIA, while non-core assets and legacy
liabilities, including debt and non-operational real estate, were transferred
to PIA Holdco, now publicly listed. PIA now operates as a wholly owned
subsidiary of Holdco.
This restructuring appears to be yielding
positive results. According to Profit,
PIA posted a net profit of Rs26.2 billion in 2024, with an operating profit of
Rs9.4 billion and earnings per share of Rs5.01. This marks a dramatic
turnaround from 2023, when the airline reported a net loss of Rs104 billion, or
Rs20 per share.
The 2024 results represent the airline’s first
annual profit since 2004, when it earned Rs2.3 billion. Between 2005 and 2024,
PIA had accumulated over Rs600 billion in losses.
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Commission suggests tightening of criteria for PIA bidders
Operational performance has also improved.
Over the past year, PIA transported nearly 4 million passengers to 30
destinations, operating an average of 268 weekly flights. The airline continues
to function as a full-service carrier, supported by divisions such as
engineering, cargo, ground handling, catering, and flight training.
To ensure the credibility of potential buyers,
the Privatization Commission Board has revised its pre-qualification criteria,
aimed at excluding speculative investors and selecting only technically and
financially capable parties.
The
government is targeting a transaction close by the end of 2025, as part of its
long-term goal to privatize PIA, cut fiscal losses, and bring to a close a
privatisation saga nearly two decades in the making.
Source: Profit Pakistan