Pakistan PM’s Privatisation Adviser Defends PIA Sale Terms, Says New Owners Likely To Take Over Operations By April
Pakistan Prime Minister’s Adviser on Privatisation, Muhammad Ali, has rejected criticism of the Pakistan International Airlines (PIA) privatisation deal, insisting that the move is designed to revive the loss-making national carrier rather than diminish national pride. He dismissed social media claims that PIA was sold for less than the value of its aircraft as “incorrect and misleading”, saying such assertions do not reflect the realities of the transaction. Ali made the remarks at a joint press conference with Federal Information Minister Atta Tarar on Wednesday, a day after a consortium led by Arif Habib Corporation emerged as the highest bidder for a 75% stake in PIA with an offer of Rs 135 billion, under which the government would receive 7.5% in cash and 25% in equity value.
Ali explained that the total valuation of PIA stood at Rs 180 billion. “Our structuring was such that we get Rs 10 billion in cash and the value of our equities is Rs 45 billion. So the government will get Rs 55 billion in total, and Rs 125 billion will flow back into PIA,” he said. He stressed that the deal was deliberately structured to inject fresh capital into the airline instead of merely changing ownership. “We did not want a situation where the government sells the airline, takes money, and the company still collapses,” he added.
The adviser also clarified that PIA’s liabilities remained substantial. “We are transferring Rs 180 billion in liabilities to the new buyer,” he said, noting that the government had cleared long-term debt in advance because otherwise “nobody would have come forward” to acquire the carrier. He underlined that the privatisation of PIA was seen as a key test of Pakistan’s reform commitment in the eyes of the International Monetary Fund (IMF).
New owner expected to run PIA by April
Ali told Reuters that, subject to approvals, the new owner is expected to be running PIA by April. The process now moves to final clearances from the Privatisation Commission board and the federal cabinet, which are anticipated within days. Contract signing is likely within about two weeks, followed by a financial close after a 90-day period to complete regulatory and legal requirements.
Arif Habib–led consortium tops bidding
The consortium led by Arif Habib Corporation and Lucky Cement advanced to the open auction stage after submitting bids above the reference price of Rs 100 billion, while private airline Airblue dropped out after making an offer of Rs 26.5 billion. The winning group also includes fertiliser producer Fatima, private education chain City Schools and real estate company Lake City Holdings Limited.
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Ali said that while Fauji Fertiliser Company did not submit a bid, it could still join the successful consortium as a partner, subject to eligibility. The buyer will be allowed to induct up to two additional partners, which could include a consortium member or a foreign airline, provided they meet the qualifying criteria. Fauji Fertiliser had initially shown interest but later pulled out of the race.
‘PIA lost Rs 500 billion in 10 years’
Ali noted that efforts to pursue a “strategic sale” of PIA began around 20 years ago, and that a previous attempt made last year had failed. Reflecting on the airline’s decline, he said that five decades ago PIA operated about 50 aircraft and, based on growth, should ideally have expanded its fleet to 100–115 planes by now, but is currently flying only 18.
He further highlighted the scale of PIA’s financial distress, stating that from 2015 to 2024 the airline accumulated losses of Rs 500 billion over a 10-year period.