The United Arab Emirates has withdrawn from plans to take over the management of Islamabad’s international airport, marking a setback for Pakistan’s privatisation
efforts and highlighting changing alignments among key Gulf partners. According to a report by the Express Tribune on Friday, negotiations collapsed months after an initial framework agreement was reached with Pakistan’s financially strained government. The proposed deal, agreed in principle in August 2025, was expected to bring much-needed foreign investment into Pakistan’s struggling aviation sector. However, the report said discussions eventually stalled after the UAE lost interest in the project and did not appoint a local partner to handle outsourced operations. Why The Airport Deal Fell Through While the report did not cite any political reasons behind the breakdown of talks, the timing of the withdrawal has drawn attention. It comes amid visible shifts in relationships between Pakistan, Saudi Arabia, and the UAE, two Gulf powers with deep influence across South Asia. Pakistan maintains long-standing economic and strategic ties with both countries, but it has traditionally leaned closer to Saudi Arabia. That bond was reinforced in September 2025 when Islamabad and Riyadh signed a mutual defence pact, with Turkey now considering joining the arrangement. At the same time, the UAE has been strengthening its defence relationship with India, Pakistan’s regional rival, signalling a recalibration of its strategic priorities. Aviation Ties And Pakistan’s Sector Challenges The UAE and Pakistan share a long history of cooperation in aviation. Pakistan played a key role in the early days of Emirates Airlines in the 1980s, offering technical expertise, trained personnel, and leasing its first aircraft, one of which flew Emirates’ inaugural route between Dubai and Karachi. Since then, however, Pakistan’s own national carrier has seen a sharp decline. Reviving Pakistan’s aviation industry presents a formidable challenge. Years of mismanagement, fatal air crashes, pilot licence controversies, and outdated technology have left the sector in poor shape. Although the UAE has experience operating in high-risk environments, its GAAC company holds ground service licences at airports in Kabul, Herat, and Kandahar; taking on Islamabad airport would have required a significant long-term commitment. Pakistan’s national airline, once a regional leader, was recently sold to a consortium led by businessman Arif Habib, showing the government’s push to offload loss-making state assets. Gulf Rivalries And Strategic Calculations Beyond aviation, broader geopolitical undercurrents are at play. Pakistan has long supported Saudi Arabia by providing military officers and advisors, while Riyadh has repeatedly extended financial lifelines to Islamabad, including a $6 billion aid package in 2018 and large deposits in Pakistan’s central bank. Both Saudi Arabia and the UAE have used financial muscle to support allies, often blending political influence with commercial interests. While negotiations with Pakistan moved slowly, the UAE acted decisively elsewhere, most notably in Egypt, where Abu Dhabi committed $35 billion in 2024 for development rights along the Mediterranean coast. Meanwhile, Pakistan has increasingly turned to Middle Eastern partners to market its defence exports following a brief but deadly conflict with India last year. Saudi Arabia is backing deals involving Pakistani aircraft, drones, and air defence systems for Sudan. In contrast, the UAE has been edging closer to India, recently signing agreements to expand defence and trade ties, including a $3 billion LNG supply deal and cooperation on nuclear energy and safety.
