Adviser to the Finance Minister Khurram Schehzad has clarified that the government is not purchasing aircraft for Pakistan International Airlines (PIA) and has not announced any sovereign guarantee for a taxpayer-funded loan to finance the airline’s potential acquisition of new aircraft. The clarification came after claims circulated on social media suggesting that government officials were arranging or negotiating sovereign-linked financing for new jets. Schehzad said the government’s involvement was focused on facilitating access to international financing and commercial opportunities rather than taking on direct borrowing or financial liabilities for the privatised airline.
The clarification follows discussions between Finance Minister Muhammad Aurangzeb and John Jovanovic, President and Chairman of the United States Export-Import Bank (US EXIM Bank), held on the sidelines of the 81st session of the United Nations General Assembly in New York. According to Pakistan’s Ministry of Finance, the discussions covered potential financing opportunities for aircraft procurement by PIA, refinery upgrades and the Reko Diq mining project. During the meeting, Aurangzeb highlighted PIA’s interest in Boeing 787 Dreamliner aircraft and sought support for a financing package covering aircraft and engines. The government has also indicated that possible financing for aircraft pre-delivery payments could form part of the broader cooperation framework being discussed with US EXIM Bank.
Schehzad explained that US EXIM Bank’s role is to support exports and employment linked to products manufactured in the United States. Since Boeing aircraft are US exports, the bank can provide financing support to foreign purchasers of US-manufactured aircraft, including airlines, through established financing arrangements. He said the bank’s framework includes asset-backed aircraft financing, under which financing may be secured against the aircraft itself, while the credit assessment can take into account the airline, lessee or any guarantor involved in the transaction. According to his explanation, a sovereign guarantee from the government is not automatically required under such a structure.
The government’s position is therefore that discussions with US EXIM Bank should not automatically be interpreted as a commitment by the state to finance PIA’s aircraft purchases. Schehzad said the government was acting to facilitate access to international financing, technology, suppliers and investment opportunities for Pakistani businesses. He also stressed that the finance minister’s engagement with US EXIM Bank was broader than the aviation sector and included possible financing opportunities involving refinery upgrades and the Reko Diq mining project. The Ministry of Finance has separately described the discussions as part of efforts to expand Pakistan-US economic and commercial cooperation through a broader framework for financing, technology, equipment and services.
The issue has also emerged in the context of PIA’s privatisation. Schehzad pointed out that PIA was privatised through an auction in December last year and said the government was not purchasing aircraft for the airline. His comments were aimed at distinguishing between government facilitation of commercial financing and direct state financing of a private-sector business. He said that claims suggesting a public loan, hidden subsidy or state-backed arrangement should not be presented as established facts when no such arrangement has been announced. The official position, according to his clarification, is that potential US EXIM financing support is being explored without an announced government borrowing arrangement or sovereign guarantee for PIA.
The clarification also reflects the government’s stated approach toward private-sector participation following the privatisation of state-owned enterprises. Schehzad said the government was reducing its direct role in commercial activity while continuing to support businesses by creating access to international markets, financing sources, technology providers and suppliers. In this context, government engagement with international financial institutions and export credit agencies is being presented as facilitation rather than direct management or ownership of commercial operations. He added that privatisation transfers ownership and commercial management but does not prevent the government from helping Pakistani companies access international commercial opportunities.
For PIA, the immediate focus remains on exploring financing structures that could support the airline’s fleet expansion and aircraft requirements without an announced sovereign-backed borrowing arrangement. The discussions with US EXIM Bank form part of wider Pakistan-US economic engagement covering aviation, refining and mining. The Ministry of Finance has said both sides agreed to continue work on a broader cooperation framework while identifying specific transactions that could potentially receive support. For PIA, this includes the possibility of financing related to Boeing aircraft, while the broader discussions are also linked to efforts to strengthen commercial and investment activity across several sectors.
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