A Pakistani firm on Tuesday (Dec 23) won an auction with a US$482 million bid for a majority stake in the loss-making national carrier Pakistan International Airlines (PIA), in a deal seen as a key test of the government’s privatisation drive.
The Arif Habib investment group emerged as the highest bidder, offering 135 billion rupees for a 75 percent stake in PIA, with an option to buy the remaining 25 percent in the coming months. The auction was carried live by state broadcasters, with three Pakistani firms participating.
Prime Minister Shehbaz Sharif said transparency was critical given the scale of the transaction. “It was essential to make this process transparent because the biggest transaction of Pakistan’s history is about to take place,” he told his cabinet as the bidding began.
COMPETITIVE BIDDING
Two other bidders took part in the auction. A consortium led by Lucky Cement offered 134 billion rupees, while private carrier Air Blue bid 26.5 billion rupees.
The sale follows a failed privatisation attempt last year, when the government received just one bid of US$36 million, far below its target range of US$300 million to US$305 million.
PIA has long been criticised for bloated staffing, mismanagement and persistent losses. Before being delisted from the Pakistan Stock Exchange, the airline reported a net loss of US$437 million for 2022 on revenue of US$854 million.
IMF-BACKED PRIVATISATION PUSH
Islamabad has pledged to divest dozens of loss-making state-owned enterprises by 2029 under a US$7 billion loan programme agreed with the International Monetary Fund last year. The government says repeated bailouts of poorly run firms have drained public finances and worsened the country’s balance-of-payments pressures.
Officials argue that privatisation is essential to reduce fiscal risks and attract private investment, though the policy has faced political resistance and labour opposition.
FALL FROM GRACE
Founded in 1955, PIA was once a symbol of national pride, pioneering international routes and even showcasing flight attendant uniforms designed by French couturier Pierre Cardin in the 1960s.
Its reputation deteriorated over the years amid mounting losses and safety lapses. In June 2020, a month after one of its Airbus A320 jets crashed into a Karachi neighbourhood killing nearly 100 people, the airline was banned from flying to the European Union, Britain and the United States.
