Pakistan to seek fresh bids next week for sale of national airline

The Pakistan government has restarted efforts to sell the national flag carrier — Pakistan International Airlines Corporation Limited (PIACL) — and will seek fresh bids from interested companies next week.

The sell-off of the airline and its assets, along with reducing losses at state-run companies, is one of the key conditions of the International Monetary Fund for the $7 billion loan program.

According to officials, the Privatization Commission Board has approved seeking of new Expressions of Interest to proceed with the sale of Pakistan International Airlines.

The commission has also approved the pre-qualification criteria for selection of potential bidders for privatization of 51-100% shares of PIACL.

The government has been making efforts since long to sell loss-making entities of the country, which according to the latest reports, have led to a loss of more than PKR 841 billion in addition to incentives in excess of PKR 1.5 trillion annually to try and make them functional.

The Pakistan government made an effort to sell Pakistan International Airlines last year when it received a solitary bid of PKR 10 billion, which was far below the reference price of $300 million.

According to the results for FY24, PIA earned an operational profit of PKR 9.3 billion and a net profit of PKR 26.2 billion.

The airline became unprofitable in 2003 and had been running on government subsidies which ran into billions of rupees.

The latest profit became possible after the government took responsibility to tackle more than PKR 600 billion in debts and interest payments of the airline separately and made it debt free.

A spokesman for PIA told Nukta, "Government took care of more than PKR 600 billion of non-operational debt while operational liabilities worth more than PKR 200 billion remain on the PIACL books. However that impacted the net profit line only because financial cost impacts after-operational profit.

"PIA achieved a healthy operational profit on its own which shows viability at operational level, meaning the airline is taking care of all its expenses."