PIA bidding process likely to conclude by early October

ISLAMABAD: The long-delayed privatisation of Pakistan International Airlines (PIA), which has been struggling with losses, is expected to be finalised by early October 2024, according to Arif Habib, Chairman of the Arif Habib Group.

“We expect the bidding process for PIA to conclude by the first week of October 2024,” Habib stated.

According to Express Tribune, as part of the privatisation deal, the government has placed certain conditions on the future buyer. The investor will not be allowed to sell PIA for at least three years after the acquisition, and they will be required to add 20 new aircraft to the fleet.

Habib is optimistic that with the right strategic direction, PIA could be transformed from a loss-making entity into a profitable venture. Currently, the airline operates 34 aircraft, a mix of long-haul and short-haul planes.

Of these, 20 are owned by PIA, while the rest are leased. PIA also employs over 10,300 staff, meaning each aircraft has an average of 304 employees.

Habib further explained that potential buyers are keen on acquiring 75 per cent of the airline’s shares, which would give them majority control. He reiterated that the new owners would not be allowed to sell PIA within three years of its privatisation.

A major hurdle in the privatisation process is PIA’s enormous debt, which stands at around Rs800 billion, including interest. Habib outlined a plan to deal with this: Rs600 billion of the debt will be transferred to a holding company, while the buyer will take on the remaining Rs200 billion.

Much of this debt is tied to tax liabilities and dues owed to the Civil Aviation Authority. Habib suggested that giving the new owners a longer period to repay the debt would ease financial pressure and help the airline recover more quickly.

“PIA has the potential to be operationally viable. Once the debt and workforce issues are addressed, the airline could swiftly become profitable,” Habib added.

The completion of PIA’s privatisation by October 2024 could mark the beginning of a new chapter for the airline, offering hope for its turnaround and future success.

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