Wednesday, December 24, 2025 | Dubai, UAE [ Posted at 8:01 PM]
Pakistan International Airlines (PIA), the country’s loss-making national carrier, is set to enter a new chapter after the government successfully concluded a long-awaited privatisation PIA Pakistan International Airlines Deal. However, a consortium led by Arif Habib Corporation has emerged as the top bidder for a 75 per cent stake.
Arif Habib Consortium Secures 75% Stake in PIA
The Arif Habib-led consortium won the live-televised auction with a Rs 135 billion ($482 million) bid. It was comfortably above the reserve price of the government of Rs. 100 billion. However, Fatima Fertilizer, City School Network, and Lake City Holdings are part of the winning group. In contrast, other bidders such as Lucky Cement and private airline Airblue were edged out after multiple bidding rounds.
Pakistan’s privatisation adviser Muhammad Ali told Reuters that the government expects the airline to be run by the new owner from April next year due to pending approvals from the Privatisation Commission board and the federal cabinet. He further said that contract signing is expected within weeks after a 90-day period to meet regulatory and legal requirements.
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Fresh Capital, Not Just Ownership Transfer
Besides earlier failed attempts, the PIA Pakistan International Airlines has been structured to input fresh capital into the airline rather than merely transfer ownership. Thus, the government will receive around Rs 10 billion upfront in cash and retain a 25 per cent stake valued at roughly Rs 45 billion.
According to the TOI report, a large portion of the proceeds (over 90 per cent) will be reinvested directly into the airline. Moreover, the Arif Habib consortium is expected to invest an extra Rs. 80 billion more than the next five years. Hence, it aimed at stabilising operations, upgrading the fleet, and restoring PIA’s credibility.
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Employee Safeguards and Strategic Flexibility
Muhammed Ali revealed that the PIA Pakistan International Airlines Deal mandates that all PIA employees be retained for at least 12 months because no changes to existing contracts are permitted during that period. Moreover, officials noted that the workforce of the airline has already reduced significantly in recent years.
He also revealed that the buyer is also allowed to add up to 2 strategic partners, including a foreign airline, if they meet the qualifying criteria. Hence, this flexibility could bring global aviation expertise and strengthen the long-term turnaround plan of PIA.
IMF Pressure and Reform Credibility of PIA Pakistan International Airlines Deal
The sale is an important test of the reform commitments of Pakistan under its $7 billion IMF programme. Moreover, the International Monetary Fund has consistently pushed Islamabad to rein in losses at state-owned enterprises, with PIA long considered a major financial drain.
Muhammad Ali described the privatisation as a signal of momentum. He warn that failure to offload loss-making entities could renew pressure on public finance. However, the government has indicated that more privatisation is in the pipeline once the PIA transaction is completed.
From National Pride to Turnaround Opportunity
The airline was founded in the late 1940s and became the symbol of the national ambition and global prestige. However, years of mismanagement, safety lapses, mounting debt, and heavy losses have pushed the airline to the brink. According to the NDTV reports, the airline has a loss of Rs 75 billion in 2023 alone and liabilities exceeding Rs 800 billion. Therefore, privatisation was the only option to protect the airline from falling.
The PIA Deal is being seen as a historic turning point for the airline due to new ownership, fresh capital, and tighter oversight. Therefore, Prime Minister Shehbaz Sharif has called it a successful privatisation that marks an important milestone for Pakistan’s economy. It would be now interesting to see whether the airline could recover the loss with this new deal.
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