Pakistan International Airlines (PIA) saw its second televised privatisation auction draw three competitive bids on Tuesday, signaling renewed investor interest after last year’s failed attempt. The Arif Habib Corporation Limited–led consortium submitted the highest offer of Rs115 billion, followed by the Lucky Cement Limited–led consortium at Rs101.5 billion, while private airline Air Blue (Private) Ltd bid Rs26.5 billion.
The auction, conducted by the Privatisation Commission, was held openly in Islamabad with live broadcasting, allowing transparency in the bidding process. Bidders submitted sealed envelopes into a transparent box, ensuring public visibility for the first time in Pakistan’s aviation privatisation history.
Privatisation Commission Chairman Muhammad Ali reiterated that the government’s objective is not merely to sell the national carrier but to restructure it into a self-sustaining enterprise. He stated that privatisation would bring much-needed investment and professional management, enabling PIA to regain its past operational and financial strength.
The first round of open bidding confirmed that two offers exceeded the government’s reference price of Rs100 billion, triggering a subsequent open auction in which lower bids can be matched or raised above the highest offer. The structure allows flexibility for bidders to acquire either the 75 percent stake on offer or pursue full ownership, with the remaining 25 percent retained by the government considered a valuable strategic holding.
The Arif Habib-led consortium includes Fatima Fertiliser Company Limited, City Schools, and Lake City Holdings Limited, while the Lucky Cement consortium comprises Hub Power Holdings Limited, Kohat Cement Company Limited, and investment firm Metro Ventures. Air Blue, Pakistan’s private airline, made a smaller bid as a third contender. Fauji Fertiliser Company Ltd, previously a major contender, formally withdrew from the auction last week.
The government has designed the payment terms to ensure continuity and stability: two-thirds of the bid amount must be paid within 90 days, and the remaining one-third within 12 months. The new owners will inherit PIA’s operational responsibilities, while pension liabilities, medical benefits, and other post-retirement perks will be managed by the holding company. Employees are assured 12 months of job security, and current salaries and benefits will continue under the new ownership.
PIA operates 78 destinations and holds approximately 170 landing slots worldwide. Analysts highlight that recent improvements—including government assumption of legacy debt, the airline’s first pre-tax profit in two decades, and the lifting of bans by Britain and the EU—have enhanced the airline’s valuation and revenue potential. These developments could materially increase investor confidence compared to last year, when a single bid of $36 million from Blue World City failed to meet the minimum reference price of $305 million for a 60 percent stake.
The sale of PIA forms a critical component of Pakistan’s broader privatisation agenda under the IMF-supported reform programme, which includes divestment in state-owned banks, power distribution companies, and other loss-making enterprises. Government officials assert that these measures aim to reduce fiscal drain, attract strategic investment, and restore confidence in Pakistan’s economic governance.
Prime Minister Shehbaz Sharif attended the first ceremony, emphasizing transparency and encouraging cabinet members to witness the second round of open bidding. Officials said the auction’s successful conclusion could pave the way for a professional turnaround of the airline and set a precedent for future high-profile privatisation efforts in Pakistan.
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