Pakistan moves forward with PIA privatization amid debt restructuring

Pakistan government is set to begin the privatization process for Pakistan International Airlines (PIA) as part of broader efforts to streamline state-owned enterprises, officials said on Friday.

The secretary of the privatization commission announced that PIA no longer holds any commercial loans, with arrangements made for its PKR 620 billion debt.

Only operational liabilities remain with the airline, including employee pension liabilities, aircraft leases, and aviation payments.

In a meeting of the Senate Standing Committee on Privatization, chaired by Dr. Afnanullah, officials reviewed progress in the privatization of various state-owned enterprises.

The government has decided to privatize 24 entities, with more institutions set to be included in the program.

Of the 84 commercial entities currently owned by the government, the future of 44 will be determined by the Cabinet Committee on State-Owned Enterprises.

“All commercial entities, except for strategic or essential ones, will be privatized,” said the Secretary of the Privatization Commission.

“Whether a commercial entity is profitable or loss-making, it will be privatized.”

Among four government-owned power generation companies (GENCOs), GENCO-II and GENCO-III will be the first to undergo privatization, officials said. Additionally, PKR 268 billion in liabilities owed to commercial banks has been transferred to the newly established HoldCo company.

The privatization efforts have already seen some successful transactions. The Heavy Electrical Complex was privatized in January 2024, followed by the completion of the privatization process for Services Hotel in January 2025.

Addressing concerns about PIA employees, Privatization Advisor Mohammad Ali assured that the government would honor its commitments.

"The pensions of 16,000 retired PIA employees are the responsibility of the federal government," he said.

Officials also emphasized that lessons have been learned from past privatization efforts, pledging to avoid previous mistakes as PIA transitions into private ownership.