ISLAMABAD: Prime Minister Shehbaz Sharif announced on Wednesday that the bidding for Pakistan International Airlines (PIA), the first state-owned enterprise scheduled for privatization under the new policy, will take place on December 23.
According to official reports, the announcement was made during a meeting with business leaders and company representatives involved in the airline’s privatization process, this move comes as Islamabad pushes forward with a renewed effort to privatize the national airline, a key requirement of Pakistan’s $7 billion International Monetary Fund (IMF) bailout agreement.
The previous attempt to privatize PIA failed when a bid of $36 million from a real estate firm fell short of the minimum price of $305 million, raising concerns about debt, staffing, and limited control over the airline, this time, the government is offering full divestment, eliminating sales tax on leased aircraft, and providing limited legal and tax protections. Approximately 80% of PIA’s debt has been transferred to the government.
During the meeting, Prime Minister Shehbaz emphasized that transparency and merit are top priorities for the government, and the bidding process will be broadcast live nationwide, he stated that the privatization aims to help PIA regain its reputation and meet modern standards, expressing optimism that the airline will soon restore its tradition of being “Great People to Fly With.”
The PM also highlighted that reviving PIA’s international flight operations would benefit Pakistanis abroad and that modernizing the airline is essential for boosting tourism. “Aligning the airline with current demands is crucial for tourism growth,” he said. Shehbaz Sharif expressed confidence that the successful bidder will focus on rebuilding PIA’s reputation and advancing its development.
Participants in the process praised the government’s move to implement a professional and transparent privatization mechanism. Privatisation Minister Muhammad Ali told Reuters last month that the government aims to generate Rs86 billion in revenue from privatization this year. He explained that during the last bidding round, 15% of the proceeds went to the government, with the remaining funds retained by the airline. Interest from local businesses like Airblue, Lucky Cement, Arif Habib Group, and Fauji Fertiliser has been renewed, with final bids expected later this year.
PIA resumed flights to the UK in July, more than five years after a ban linked to a fake pilot license scandal was lifted. Its European routes resumed earlier in January following a four-year ban. Last month, the Secretary of the Privatisation Division told the National Assembly’s standing committee that the government plans to hold the final bid for PIA by mid-December.
He added that four pre-qualified consortiums are in the final stages of negotiations regarding commercial terms, including share purchase and shareholder agreements. The secretary noted that discussions with bidders have been ongoing for the past three days, and approval of the reserve price will be sought from the federal cabinet.
