Pakistan International Airlines (PIA) is set for a major transformation as the Arif Habib Corporation Limited-led consortium successfully acquired a 75 percent stake in the national carrier with a winning bid of Rs135 billion. The transaction, part of the federal government’s ongoing privatization drive, signals a significant shift in Pakistan’s aviation sector, combining fresh capital infusion with operational restructuring.
The consortium outbid competitors during the open auction, raising its offer from Rs115 billion to Rs135 billion after the Lucky Cement Limited-led group increased its bid from Rs101.5 billion to Rs134 billion in the second round. Fauji Fertiliser Company Limited is also part of the consortium, underscoring a strategic partnership of prominent Pakistani corporate entities.
Arif Habib, founder of Arif Habib Group, stated that the consortium plans to acquire the remaining 25 percent stake in the airline, aiming for full ownership. “We have 90 days, and we also intend to buy the remaining 25 percent,” he said in a television interview. The government will receive Rs10 billion from the sale of the 75 percent stake, while the remaining 25 percent is expected to fetch Rs45 billion.
Operationally, the consortium plans to expand PIA’s fleet to 38 aircraft in the first phase, followed by a second phase that will increase the total to 64 aircraft. This expansion is expected to modernize the airline’s operations, improve service capacity, and strengthen its market competitiveness. Currently, PIA has liabilities of Rs190 billion, with assets valued at around Rs180 billion, highlighting the need for strategic restructuring and capital injection.
Adviser to the Prime Minister on Privatization, Muhammad Ali, told Reuters that the government anticipates the new owner to assume operational control by April 2026, subject to regulatory approvals. He added that the process will now move to final approvals by the Privatization Commission board and the federal cabinet, with contract signing expected within two weeks and financial close scheduled within 90 days to meet legal requirements.
Muhammad Ali emphasized that the privatization deal is structured to inject fresh capital into PIA rather than simply transferring ownership. Safeguards include retained earnest money and additional payments at signing, allowing the government to approach the second-highest bidder if the transaction fails to close.
On labour matters, the adviser confirmed that the consortium is required to retain all PIA employees for at least 12 months post-transaction under existing terms. PIA’s workforce has already seen reductions in recent years, balancing operational efficiency with employee protections.
The International Monetary Fund has closely monitored the sale, urging Pakistan to curb losses at state-owned enterprises. Muhammad Ali described the privatization of PIA as a critical test of the government’s reform agenda, noting that successful completion will signal credibility and momentum for future privatization initiatives in the country.
With the Arif Habib consortium taking the reins, Pakistan International Airlines is poised for modernization, operational improvement, and a potential turnaround that aligns with broader economic reform efforts.
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