Islamabad, Jan 9: Pakistan International Airlines (PIA) will see significant developments in its privatization this month after key events reshaped its trajectory.
Supreme Court Clears Path for Privatization
In December 2024, the Supreme Court of Pakistan dismissed a case that had previously barred the government from privatizing PIA without its approval. This decision has removed a substantial legal obstacle, enabling the government to proceed with the privatization process.
Reforms to Facilitate Privatization
However, Federal Minister for Privatization, Abdul Aleem Khan, announced reforms aimed at resolving longstanding issues to facilitate PIA privatization. These reforms include abolishing a significant tax on new aircraft purchases and restructuring financial liabilities.
Resumption of European Flights
In a move to enhance PIA’s operational credibility, the airline is set to resume flights to Europe starting January 10, 2025, beginning with Paris. This follows the lifting of a ban by the EU aviation regulator that had been in place since June 2020 due to concerns over the competence of Pakistani aviation authorities.
Privatization Process and Investor Interest
Although, government aims to sell a 51-100% stake in PIA as part of a broader strategy to stabilize its finances under a $7 billion IMF program. However, investor interest has been tepid, with only Blue World City submitting final participation documents out of the initial six qualified groups.
Challenges Ahead
Despite these positive developments, the privatization process faces challenges, including securing credible buyers and addressing concerns over the government’s reputation for reneging on agreements. The government now faces the challenge of securing credible buyers for PIA under improved terms.
As the privatization process advances, stakeholders remain attentive to the government’s efforts to navigate these challenges and achieve a successful transition for PIA.
