Pakistan completes sale of national airline to private company

Prime Minister Shehbaz Sharif on Thursday congratulated the nation on the completion of Pakistan International Airlines’ privatization as the government formally signed transaction documents with a consortium led by Arif Habib Corporation Ltd.

Sharif and Chief of Defence Forces and Army Staff Field Marshal Asim Munir witnessed the signing ceremony in Islamabad, which was attended by several federal ministers.

The Arif Habib-led consortium won the auction for a 75% stake in the national flag carrier in December last year with a winning bid of PKR 135 billion.

After the signing, Sharif said the completion of the privatization process marked a historic moment for the country and praised Arif Habib and his team, calling them “committed business ambassadors of Pakistan.”

“Their performance in the industrial growth and progress of Pakistan is very prominent,” Sharif said.

He said the consortium’s top priorities would be passenger comfort, safety and dignity, adding that Pakistan International Airlines (PIA), which peaked in the 1960s, would once again reach greater heights under private-sector management.

Earlier, Adviser to the Prime Minister on Privatization Muhammad Ali thanked Sharif and the army chief for their support, saying the transaction would not have been possible without their guidance and engagement.

“This signing marks one of the most significant milestones undertaken by the current government,” Ali said, adding that the auction process was conducted efficiently and transparently.

Ali said the privatization of PIA was the largest transaction in Pakistan’s privatization history. Total investment under the deal will amount to PKR 180 billion, equivalent to about $650 million. Of this amount, PKR 125 billion, or about $450 million, will be invested directly into PIA, while PKR 55 billion, or about $200 million, will be paid to the government.

The investment in the airline will be used for fleet expansion, service improvements and private-sector management to restore PIA to profitability, Ali said.

He added that the transaction demonstrated that Pakistan was open for business and capable of executing complex privatization deals, noting that local investors were willing to make large-scale investments.

Arif Habib, chairman of Arif Habib Corporation, said his consortium considered it an honor to participate in what he described as a national cause. He said the entire investment would be made through equity and reflected strong business confidence in Pakistan.

Habib said passengers would be the biggest beneficiaries of the transaction due to improved services. He added that meetings had already been held with aircraft manufacturer Boeing and that discussions with Airbus were also planned.

The consortium is expected to assume control of PIA within three months. Habib also announced that the group had decided to exercise its option to acquire the remaining 25% stake in the airline, which would bring an additional PKR 55 billion to the government.

“We responded to the government’s call,” Habib said. “If we succeed, it will show that businessmen, too, can serve the nation.”