The government is preparing for a second attempt at privatising Pakistan International Airlines (PIA), promising prospective buyers an offer they “can’t refuse.” While the exact terms of this offer remain undisclosed, authorities are determined to address the concerns that previously deterred serious investors. The outgoing privatisation minister has hinted at measures such as resolving taxation issues, including the 18% GST on new aircraft acquisitions, and offering relief on the debt burden that has long plagued the national carrier. These steps are essential to ensuring a smooth sale and attracting genuine investors.
The failure of the first round, which left only a real estate developer in the running and a financial loss of $4.3 million in the exchequer, was a stark reminder of the need for a more strategic and investor-friendly approach. However, the situation appears to have changed, with reports suggesting that leading business groups from Karachi and Lahore are now considering serious bids for the airline. If the government successfully makes an unencumbered offer, these investors are reportedly willing to inject the much-needed half a billion dollars to expand PIA’s fleet and operations over the next several years.
The potential revival of PIA’s European operations, alongside the eventual resumption of flights to the UK and the US, makes the airline an attractive prospect for investors. Despite its current financial troubles, PIA still holds significant value and could make a rapid recovery if managed professionally and supported by fresh equity. However, as long as the airline remains in the clutches of bureaucratic inefficiencies, any turnaround will remain impossible. The past mismanagement, political interference, and overstaffing have led to PIA’s downfall, and without breaking away from these systemic issues, even a successful privatisation deal could struggle to yield long-term benefits.
The successful sale of PIA is critical not only for the airline itself but for the broader privatisation agenda of the government. The alternative liquidation would be far more damaging, both financially and in terms of national prestige. Furthermore, the credibility of Pakistan’s privatisation programme hinges on this sale. It must be structured in a way that attracts investors who have the expertise and financial muscle to not only revive PIA but also demonstrate that the privatisation of state-owned enterprises (SOEs) can be a viable solution to Pakistan’s economic woes.
As the government moves forward with the sale, transparency and strategic planning must be prioritised to ensure investor confidence. The mistakes of the first round should serve as lessons in crafting a deal that is both lucrative and sustainable. PIA’s future depends on this process being handled with precision, and if executed correctly, it could mark the beginning of a new era for Pakistan’s aviation industry.
