Privatisation Commission says a consortium has made a successful bid of Rs135bn for the Pakistan International Airlines (PIA), marking an important step in the long-delayed Privatisation plan.
Privatisation Secretary Usman Bajwa told the Senate Standing Committee that Rs125bn from the deal would be invested in the airline, while the government would receive Rs10bn.
He said the government has already sold 75 percent shares of the airline and plans to sell the remaining 25 percent stake during the next stage of the Privatisation process.
Officials said the consortium led by Arif Habib has until 29 April to decide on purchasing the remaining shares, which could bring the government about Rs55bn overall.
Airline Valuation and Financial Restructuring
Usman Bajwa told lawmakers that the net value of Pakistan International Airlines had earlier been estimated at only Rs9bn before the privatisation process began.
Officials said the airline’s value later increased to Rs41bn after authorities reassessed and revalued its assets during the restructuring process linked to the government’s broader privatisation plan.
Mr Bajwa warned that without privatisation the airline would have continued facing annual losses of about Rs100bn, after recording cumulative losses of nearly Rs500bn between 2015 and 2023.
The briefing also said properties of the airline’s holding company were valued at Rs12bn, while liabilities worth Rs650bn were parked in Holdco and Rs180bn transferred to buyers.
Questions Raised Over Property and Profits
During the meeting, Senator Chaudhry Manzoor said some properties of Pakistan International Airlines had been sold at lower prices despite their high market value.
He referred to a building plot in New Blue Area of Islamabad, saying the property alone was worth around Rs3bn based on its estimated market value.
Mr Manzoor also questioned the airline’s financial figures, saying a profit of Rs7.3bn for 2024 was reported while Rs26bn profit was submitted to Securities and Exchange Commission of Pakistan.
Tax Policy and Airline Concessions
Lawmakers questioned a tax concession granted to buyers of PIA during the Senate committee meeting, raising concerns about government support for aircraft purchases under the Privatisation agreement.
Privatisation Secretary Usman Bajwa said the government had granted a GST exemption on the purchase of new aircraft for the airline’s buyer as part of the privatisation package.
Senator Chaudhry Manzoor asked why similar concessions were not offered to all airlines in Pakistan, while officials said a broader aviation policy was being prepared.
Progress on Privatisation Process
The Senate Standing Committee on Privatisation, chaired by Afnan Ullah Khan, received a detailed briefing on progress in the privatisation of Pakistan International Airlines.
Officials told the committee that the financial closing of the privatisation transaction is expected to be completed by the end of April if remaining procedural steps proceed smoothly.
They also said the consortium has started searching for a new chief executive and senior management team to lead the airline after the ownership transition.
Privatisation Secretary Usman Bajwa said Fauji Fertilizer Company would soon be included in the consortium after receiving approval from the cabinet committee.
The consortium has also established a new company named PIA Equity Limited, with all shareholders expected to become part of the newly created ownership structure.
