Pakistan’s long-delayed push to privatize its national airline took a decisive step forward on Tuesday after stockbroker Arif Habib Consortium submitted the highest bid of $482 million to acquire a 75% stake in Pakistan International Airlines, officials said. The bid emerged as the winner in a competitive open auction that drew three pre-qualified bidders and was held publicly before observers and television cameras.
The final round saw a close contest between Arif Habib Consortium and Lucky Cement, which raised its offer to $479 million from an initial $363 million. Air Blue Airlines also participated in the process but lagged far behind with a first-round bid of $95 million. The bids were opened and announced by Pakistan’s Privatization Commission in the evening local time.
An official familiar with the transaction said 7.5% of the sale proceeds would be transferred to the national exchequer, while the remaining funds would be reinvested into the airline to upgrade infrastructure and operations. The official spoke on condition of anonymity as the deal has yet to be formally concluded.
The auction marked the government’s second attempt to offload its stake in PIA after a failed privatization effort in October last year, when the sole bid of $36 million fell well short of the $305 million floor price set by authorities. This time, stronger financials and aggressive bidding helped push valuations significantly higher.
Privatizing PIA has been a key demand of the International Monetary Fund as part of Pakistan’s ongoing $7 billion loan program. Islamabad had committed to completing the transaction by the end of December, positioning the sale as a cornerstone of broader structural reforms aimed at reducing the burden of loss-making state-owned enterprises.
PIA’s improved balance sheet has played a critical role in reviving investor interest. In the financial year ended December 2024, the airline posted revenue of $733 million and a net profit of $94 million, its first profit in two decades. The turnaround was largely driven by lower interest expenses after $2.4 billion in debt was transferred to its holding company. The airline currently holds total assets of $672 million against liabilities of $659 million.
Despite its recovery, PIA operates a relatively modest fleet of 17 active aircraft and employs more than 6,500 people. It commands about 30% of Pakistan’s domestic aviation market and roughly 16% of international routes, making it the second-largest carrier domestically and the leading airline for Pakistanis traveling abroad. These figures are sharply lower than in 2011, when PIA dominated 78% of domestic traffic and 43% of international travel.
Officials and industry experts say a successful PIA privatization could unlock the government’s wider plan to divest more than two dozen state-owned enterprises by 2029, potentially reshaping Pakistan’s economic landscape and signaling renewed confidence to global investors.
