PIA Sale Leaves Pakistan with Heavy Debt and Just Rs 10 Billion Cash
Pakistan International Airlines’ sale raises alarms as billions in public liabilities are transferred to private hands, critics say.
Pakistan’s move to privatise Pakistan International Airlines (PIA) has drawn sharp criticism, with analysts calling it a “wealth transfer disguised as reform.” The government has shifted around Rs 650 billion of PIA’s historic debts into a holding company, shielding the buyer from massive accumulated losses while selling a debt-free operating entity to a private consortium led by Arif Habib Corporation.
The headline valuation of the privatisation is about Rs 135 billion, but only Rs 10 billion will flow directly to the state. The remainder is infused as equity into the airline, leaving taxpayers responsible for decades of losses while the private buyer gains a potentially profitable enterprise. Observers say this arrangement consolidates past mismanagement rather than addressing it.
PIA’s decades-long buildup of fleet, international routes, and strategic landing rights now rests in private hands at valuations critics argue are below replacement cost. Accounting for brand value, network benefits, and regulatory privileges, the deal is seen as disproportionately favoring the consortium at the public’s expense.
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The transaction highlights a pattern where political interference and mismanagement have burdened the public, yet the upside of operational improvements and future profits is reserved for private actors. Experts note that the governance framework surrounding PIA remains largely unreformed, raising doubts about long-term accountability.
Critics argue that while privatisation is marketed as a reform to end losses, the deal primarily reallocates risks and benefits. The state continues to service the airline’s Rs 650 billion debt, receives limited immediate cash, and holds only a minority equity stake, while the private consortium enjoys a de-leveraged entity with potential future gains.
This controversial privatisation underscores concerns about transparency, governance, and social costs in Pakistan’s reform agenda, sparking debates over whether the move truly benefits the public or merely enriches a select few private actors.
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