Pakistan Sold 75% Of PIA For $482M: A consortium led by Arif Habib Limited won a televised auction for 75% of Pakistan International Airlines, with about $446m to be reinvested into the airline and roughly $36m paid to the state. The sale was driven by IMF conditions and a need to stem mounting losses, after the government separated $2.3bn in long-term liabilities to make the deal viable. Critics cite transparency and concern about the military-linked Fauji Fertilizer Company joining the consortium; supporters say privatisation was the most realistic option to stabilise PIA.
Why Pakistan’s Sale Of PIA Has Sparked A Political Firestorm
Adviser to the prime minister on Privatisation, Muhammad Ali, has said that PIA accumulated more than $1.7bn in liabilities between 2015 and 2024, while long-term liabilities exceeded $2.3bn [Salahuddin/Reuters]
Pakistan International Airlines (PIA) saw a 75% stake sold this week in a government-televised auction, ending decades of failed privatisation attempts and igniting intense political debate. The winning consortium, led by Karachi brokerage Arif Habib Limited (AHL), paid $482 million for the majority stake; shortly after the auction Fauji Fertilizer Company Limited (FFC) — a publicly listed firm with ties to the military-run Fauji Foundation — joined the group.
How The Auction Unfolded
The bidding took place in a packed Islamabad hotel and lasted about 90 minutes. Three parties submitted initial offers; Air Blue was disqualified from open bidding after submitting $94.59 million, well below the government’s minimum. The AHL-led consortium won the open auction with a final bid of $482 million for 75%.
Deal Structure And Timeline
Government advisers say roughly 92.5% of the winning bid — about $446 million — will be reinvested directly into PIA, while approximately $36 million will be paid to the state in cash. The government retains the remaining 25% stake (valued by officials at roughly $160.6 million) and the consortium has signalled its intention to offer to buy that stake within three months. Under the sale terms, buyers must pay two-thirds of the purchase price within three months and the remaining one-third within a year.
Why The Privatisation Happened Now
The sale came under strong pressure from the International Monetary Fund (IMF). As part of a $7 billion loan programme, Islamabad committed to divesting loss-making state-owned enterprises. To make PIA more attractive, the government last year separated more than $2.3 billion of long-term liabilities into a separate vehicle and offered policy continuity guarantees and tax relief, measures approved by the IMF.
PIA’s Decline: Facts And Figures
Once Pakistan’s flagship carrier — founded in 1955 and at one time operating a fleet of about 50 aircraft and flying to nearly 40 international destinations — PIA has seen a steady decline. Officials say liabilities grew by more than $1.7 billion between 2015 and 2024 and that long-term liabilities now exceed $2.3 billion. Of a fleet of 33 aircraft, only 18 are operational. The airline serves roughly 30 destinations with about 240 weekly round-trip flights and currently holds more than 30% of the domestic market (down from the 60% range in earlier decades). PIA still retains landing rights for at least 78 destinations and access to over 170 airport slots.
Safety, Staffing And Reputation
PIA’s workforce has shrunk from more than 19,000 employees in 2014 (including at least 16,000 permanent staff) to fewer than 7,000 today. Its safety and management record was badly damaged after a June 2020 crash in Karachi that killed 97 people and led to allegations about dubious pilot licences; the European and UK bans imposed during that period were lifted in late 2024 and mid-2025 respectively, allowing flights to Europe to resume.
Political And Economic Controversy
The transaction has drawn sharp criticism from opposition parties and commentators. The Tehreek Tahafuz Ayeen-i-Pakistan (TTAP), led by Pakistan Tehreek-e-Insaf (PTI), called the sale unacceptable without broader public mandate, parliamentary oversight and clearer legal legitimacy. Critics have also argued that because most of the purchase price will be invested back into PIA, the state effectively receives only a modest cash payment.
Government Response: Muhammad Ali, the adviser on privatisation, rejected claims the deal short-changed the state, saying the structure delivers cash plus equity value and that the bulk of funds will be used to stabilise and relaunch operations.
Analysts’ Views
Some economists and aviation experts argue the sale was the most pragmatic outcome given the mounting liabilities. Fahd Ali (LUMS) described the agreement as 'watertight' and warned against selling landing rights that could harm future revenue. Khurram Husain, an economic commentator, said the government had to choose between shutting the airline down or handing it to private operators to stop losses from ballooning further.
Concerns Over Military-Linked Ownership
FFC’s late entry into the consortium has intensified scrutiny because the Fauji Foundation — a powerful military-controlled institution — owns a significant stake in FFC. Observers fear this may extend the military’s economic footprint in aviation and risks shifting PIA 'from one arm of the state to another.' Supporters counter that involving FFC may offer political stability and investor assurance in a country where policy can change rapidly.
What Comes Next
The consortium has signalled plans to relaunch and revive the carrier, with an aim to restart expanded operations by the target date set by its leadership. Over the coming months, attention will focus on whether the buyers follow through with payments, the proposed reinvestment, and any attempts to buy the remaining 25% stake — plus how regulators manage competition and national-security concerns.
