PIA privatization takes off: Govt invites bids for majority stake

Pakistan will invite bids from interested parties to acquire a stake in the national airline, with the process set to begin on Thursday, according to sources close to the Privatization Ministry.

The country’s Privatization Commission will issue an Expression of Interest, giving companies 40 days to express their intent to acquire a majority stake in Pakistan International Airlines.

Selling the airline and its assets, along with cutting losses at state-owned enterprises, is a key condition of the International Monetary Fund’s $7 billion bailout program for Pakistan.

According to officials, the commission's board last week approved the issuance of fresh Expressions of Interest for the sale of Pakistan International Airlines. The board also approved pre-qualification criteria for selecting potential bidders to privatize 51% to 100% of PIACL shares.

Moreover, it has been learned that the financial advisor for Roosevelt Hotel suggested three options for the sell off.

The board has decided to either sell the airline’s white elephant Roosevelt Hotel in New York or operate it through a joint venture, the source said..

The third option on the table was a 99-year lease, but it was scrapped.

The final say on the matter is with the Cabinet Committee on Privatization.

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 has been unprofitable since 2003, relying on government subsidies that amounted to billions of rupees over the years.

Its recent return to profitability was only possible after the government assumed responsibility for over PKR 600 billion in debt and interest payments, effectively making the airline debt-free on paper.

A PIA spokesperson told Nukta, “The government took care of more than PKR 600 billion of non-operational debt, while operational liabilities worth over PKR 200 billion remain on PIACL’s books. However, that only impacted the net profit line, as financial costs affect profits after operational expenses.”