Three Bidders Emerge for Pakistan's PIA Privatization Sale

Pakistan has taken a major step toward privatizing its national carrier, Pakistan International Airlines (PIA), after receiving three bids for a majority stake in the airline. According to reports, the government received sealed offers from two domestic business groups led by prominent businessmen Muhammad Ali Tabba and Arif Habib, along with a bid from private airline Airblue for a 75 per cent stake. Authorities are expected to announce a minimum price and formally open the bids shortly.

This marks a notable improvement over last year’s attempt to sell PIA, which failed after attracting only a single bid far below the government’s expected valuation of approximately $300 million. To revive investor interest this year, the government undertook a series of structural and financial reforms aimed at making the airline more attractive to potential buyers.

As part of the incentive package, the government significantly reduced PIA’s outstanding debt, removed sales tax on the purchase of new aircraft, and offered protection from select taxes and legal liabilities. It also assured bidders that key tax exemptions would remain in place for 15 years. Nearly 92 per cent of the proceeds from the sale are expected to be reinvested directly into the airline to support its revival.

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The decision to sell PIA stems from years of financial distress and operational inefficiencies. The airline has consistently reported heavy losses, survived largely on government bailouts, and struggled with political interference, poor management, and an ageing fleet of just 18 aircraft. Additionally, PIA employs a disproportionately large workforce relative to its fleet size, further straining finances.

Privatization is expected to play a crucial role in PIA’s turnaround. Reports indicate the airline could face a cash shortfall of nearly ₹80 billion over the next two years without fresh investment. A new owner would be positioned to inject capital, modernize the fleet, improve services, and strengthen operational efficiency.

The deal also offers long-term upside for the buyer, including the option to purchase the remaining shares at a later stage at a higher valuation. It includes ownership of PIA’s overseas properties in major global cities such as Amsterdam, New York, New Delhi, and Mumbai. If successful, the sale could reshape Pakistan’s aviation sector and mark a turning point for one of the country’s most troubled state-owned enterprises.

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