Amid Reform Push Pakistan International Airlines (PIA) is nearing a critical milestone in its privatization journey, with the final bidding process expected to conclude by October 2025.
This move, driven by Pakistan’s IMF-mandated reforms to streamline loss-making state-owned enterprises, aims to sell a 51-100% stake in the national carrier, addressing years of financial strain.
The Privatisation Commission is overseeing the process, with prequalified bidders currently conducting due diligence on PIA’s operations. The National Assembly’s Standing Committee on Privatization has demanded transparency, instructing the commission to disclose Privatization Board members’ details at its next meeting. Concerns have been raised about ensuring a level playing field, particularly for bidder Fauji Fertilizer Company, to maintain credibility in this high-profile sale.
Four entities were shortlisted after submitting Statements of Qualification in June 2025:
- Airblue: A leading Pakistani airline.
- Fauji Fertilizer Company: A military-backed entity.
- Lucky Cement Consortium: Includes Hub Power Holdings, Kohat Cement, and Metro Ventures.
- Arif Habib Corp. Consortium: Comprises Fatima Fertilizer, The City School, and Lake City Holdings.
These bidders were selected from five initial expressions of interest, reflecting strong competition for PIA’s stake.
Financial Restructuring to Boost Appeal
To make PIA more attractive to investors, the government restructured its balance sheet in 2025, transferring approximately 80% of its debt to the state and abolishing sales tax on leased aircraft. These steps aim to alleviate the airline’s financial burdens, which have long contributed to its persistent losses.
Following prequalification in July 2025, the bidding process is on track to conclude by October, with the sale potentially finalized by December 2025. The timeline was extended from an earlier July target to ensure a thorough and transparent process, aligning with IMF requirements to reform state-owned enterprises. This marks Pakistan’s third attempt to privatize PIA after previous failures, with additional plans to explore joint ventures for assets like the Roosevelt Hotel.
PIA’s privatization is part of broader efforts to address Pakistan’s fiscal challenges, with national public debt reaching Rs. 76,007 billion by March 2025. A successful sale could reduce financial strain and enhance efficiency in the aviation sector.
