Process of privatization of PIA to conclude by April 2026
The federal government is close to finalizing
the privatization of Pakistan International Airlines
(PIA), with the process expected to conclude by the end of April 2026.
Officials anticipate generating approximately Rs.45 billion from the sale of
the remaining 25% stake in the national carrier.
According to officials briefing the Senate
Standing Committee on Privatisation, total proceeds from the transaction are
projected to reach around Rs.55 billion, marking a significant step in the
restructuring of the airline.
A consortium led by Arif Habib
has already initiated steps to take over management, including the recruitment
of a new chief executive officer and leadership team. To facilitate the
acquisition, the group has established a new entity, PIA Equity Limited, which will represent all
participating shareholders. Fauji Fertilizer
Company is also expected to join the consortium, subject to approval
from the federal cabinet committee.
Read More Consortium
expresses intention to purchase government’s remaining 25% share in PIA
Most of the privatization requirements have
been completed, with the remaining tasks being handled by two dedicated working
groups operating under a central steering committee. Government officials
emphasized that the airline has not been sold below its value. Prior to privatization,
PIA’s net asset value stood at around Rs.9 billion, which was later revised
upward following a revaluation of assets.
As part of the restructuring process,
liabilities amounting to roughly Rs.125 billion have been addressed, while
additional obligations of approximately Rs.180 billion have been transferred to
the PIA Holding Company. The holding entity currently manages assets valued at
about Rs.12 billion.
Financially, PIA has shown signs of recovery.
The airline reported a profit of Rs.7.3 billion in 2024 and has submitted a
profit figure of Rs.26 billion to the Securities
and Exchange Commission of Pakistan, reflecting improved performance
after years of losses.
Employee welfare also remains a key focus
during the transition. The airline has approximately 16,500 pensioners,
including 12,500 active beneficiaries. Proposals by the State Life Insurance Corporation to provide
medical insurance coverage for retired employees have been approved, with
arrangements being finalized in coordination with hospitals across the country.
The committee also reviewed broader aspects of
the privatization process, including asset management, tax incentives on
aircraft acquisitions, and measures to improve post-retirement benefits for
employees.
Read More New
owners say more jobs will be created in Pakistan International Airlines (PIA)
Additionally, members highlighted the untapped
potential of Gwadar International Airport
as a future regional hub, given its strategic proximity to Middle Eastern and
Central Asian markets. The airport could play a key role in enhancing
connectivity and boosting air traffic in the region.
Overall,
the near-completion of PIA’s privatization marks a pivotal moment for
Pakistan’s aviation sector, with expectations of improved efficiency, financial
stability, and service quality in the years ahead.
Source:
Bloom Pakistan