Pakistan Government Sells National Airline

In a historic move marking a new era in Pakistan’s aviation sector, the government has sold a 75 per cent stake in the state-owned national carrier, Pakistan International Airlines (PIA). The sale, finalised on Tuesday, 23 December, has been hailed as the largest transaction in the country’s corporate history.

Arif Habib Investment, a prominent Pakistani investment group, emerged as the successful bidder, acquiring the majority stake for PKR 135 billion (approximately USD 482 million). The sale surpassed the government’s reference price of PKR 100 billion, highlighting the competitive interest in PIA’s privatisation.

The auction, broadcast live on state television, saw participation from three domestic firms. Pakistan’s Prime Minister, Shehbaz Sharif, described the event as “the largest transaction in the nation’s history” and emphasised the importance of transparency throughout the process.

Arif Habib Investment Group submitted its bid over two rounds of tendering and ultimately secured the deal, agreeing to pay PKR 135 billion for the 75 per cent shareholding. Under the terms of the agreement, the consortium also has the option to acquire the remaining 25 per cent of PIA’s shares in the coming months.

The main competitor in the auction was a consortium led by Lucky Cement, which offered PKR 134 billion. Private airline Airblue submitted a significantly lower bid of PKR 26.5 billion. Last year, an earlier attempt to privatise PIA had failed.

Founded in 1955, PIA has long been a symbol of national pride and economic growth. Its reputation soared during the 1960s, thanks in part to the iconic uniforms designed by French couturier Pierre Cardin and the airline’s extensive international network. However, in recent years, PIA has struggled with repeated financial losses and severe safety concerns. In June 2020, an Airbus A320 crashed in Karachi, leading to flight bans in Europe and the United Kingdom. Although operations resumed in Europe and the UK this year, flights to the United States remain suspended. Currently, only 18 of the airline’s 34 aircraft are operational.

PIA Privatisation Auction Summary

The sale of PIA is widely regarded as a transformative step for Pakistan’s aviation industry, potentially improving efficiency, modernising the fleet, and restoring confidence in the airline’s global operations.