Pakistan has decided to sell its entire 100% stake in Pakistan International Airlines (PIA) after all prospective bidders sought full managerial control with no government involvement following privatisation,
local media reported on Wednesday.
Bidding for the loss-making national carrier is scheduled for December 23 and will initially be conducted for a 75% stake. The winning bidder will have the option to acquire the remaining 25% within a month, at a 12% premium. Officials said the premium reflects the flexibility granted to buyers to defer payment for up to a year instead of making an immediate full payment.
According to officials quoted by The Express Tribune, the government will receive only 7.5% of the bid amount in cash, while the remaining 92.5% will be injected directly into PIA to support its revival.
Privatisation Commission officials said the decision to sell the entire stake was taken after all four bidders made it clear that they wanted the government to have no role in the airline post-sale. Major bidders include the Lucky Cement Consortium, Arif Habib Consortium, Fauji Fertiliser (owned by the Fauji Foundation), and private airline Air Blue.
Prime Minister’s Adviser on Privatisation Muhammad Ali confirmed the move, saying bidders were seeking at least 75% ownership to ensure operational control, with some insisting on 100% ownership. He said reviving PIA would require substantial investment, particularly for fleet modernisation and aircraft acquisition.
Earlier, Prime Minister Shehbaz Sharif had proposed selling only a 60% stake, but the plan failed to attract serious interest in 2024. To improve PIA’s appeal, the government transferred PKR 654 billion of the airline’s debt to a holding company, leaving PIA with a positive equity of PKR 30 billion, privatisation officials said.
This year, the airline is set to receive PKR 34.7 billion from the federal budget to cover debt servicing, pensions and medical expenses. However, even after the debt restructuring, new owners will still need to clear around PKR 26 billion in outstanding taxes and airport charges.
PIA currently owns 34 aircraft, of which only 18 are airworthy, but retains valuable landing slots and air service agreements with 97 countries, making it an attractive asset for potential buyers. The government has also assured bidders of continued support, legal protection, and indemnity against certain liabilities to facilitate the sale.
Why is Pakistan Selling PIA?
The decision to sell Pakistan International Airlines stems from years of financial distress and failed turnaround attempts. PIA has been a chronic loss-maker due to political interference, overstaffing, weak management, and an ageing fleet, forcing the government to repeatedly bail out the airline at a high cost to public finances.
The airline had accumulated debt of over PKR 650 billion (₹2000 crore), making continued state ownership unsustainable. As part of broader fiscal reforms and commitments under Pakistan’s IMF programme, the government is seeking to reduce losses from state-owned enterprises and curb budgetary drain.
Earlier plans to sell a partial stake in PIA failed to attract serious buyers, with investors insisting on full or near-full control to run the airline independently and make commercial decisions. To improve the airline’s attractiveness, the government shifted most of PIA’s debt to a separate holding company, leaving it with positive equity, but concluded that only complete privatisation could ensure fresh investment, professional management, and long-term revival.
Once regarded as one of Asia’s most prestigious carriers, the Pakistani flag carrier played a pioneering role in global aviation and even helped in the early formation of Emirates, offering technical expertise, aircraft, and training in its initial years, making its decline a stark riches-to-rags story.
