Islamabad, December 24 — Pakistan International Airlines (PIA) is expected to be run by new owners from April 2026, subject to regulatory and government approvals, as the federal government moves ahead with the long-delayed privatisation of the national flag carrier, Adviser to the Prime Minister on Privatisation Muhammad Ali said on Wednesday.
Speaking to Reuters in an online interview, Ali said the process had entered its final stages following a successful bidding round, with a consortium led by the Arif Habib Corporation emerging as the top bidder for a 75 per cent stake in PIA.
The consortium offered Rs135 billion in a live-televised auction on Tuesday, exceeding the government’s reserve price of Rs100 billion and marking a major breakthrough after a failed privatisation attempt last year.
“The expectation is that, subject to approvals, the new owner will be running the airline by April,” Ali said.
According to him, the deal now requires approval from the Privatisation Commission Board and the federal cabinet, which is expected within days. Contract signing is likely within two weeks, followed by a 90-day period to meet regulatory and legal requirements before financial close.
Under the agreement, the government will receive around Rs10 billion in upfront cash and retain a 25 per cent stake in the airline, valued at approximately Rs45 billion. Ali said the transaction was deliberately structured to inject fresh capital into PIA rather than simply transferring ownership.
“We did not want a situation where the government sells the airline, takes its money and the company still collapses,” he said.
The winning consortium includes Arif Habib Corporation along with Fatima Fertilizer, City School Network and Lake City Holdings Limited. Ali said Fauji Fertilizer Company, which initially showed interest but did not bid, could still join the consortium as a partner. He added that the buyer is allowed to bring in up to two additional partners, including a foreign airline, provided they meet the qualifying criteria.
Allowing additional partners would strengthen the consortium financially and could bring international aviation expertise, he said.
The privatisation deal is being closely watched by the International Monetary Fund (IMF), which has repeatedly urged Pakistan to stem losses at state-owned enterprises. Ali said PIA’s sale was a key test of Pakistan’s reform credibility.
“Failure to offload loss-making state firms puts pressure back on public finances,” he said, adding that successfully closing the deal would demonstrate momentum on reforms and pave the way for future privatisations.
To safeguard the process, Ali said the government has put in place protections, including retained earnest money, standby letters of credit and a demand promissory note. If the deal fails to close, the government would have the option to move to the second-highest bidder.
On labour concerns, Ali said the buyer is required to retain all existing employees for at least 12 months after the transaction, with no changes to employment contracts. He noted that PIA’s workforce has already been reduced over the years.
Addressing a separate press briefing in Islamabad, Ali said the “strategic sale” of PIA had been under discussion for nearly two decades, with the latest successful attempt the result of six months of intensive effort, due diligence and coordination among stakeholders.
He credited Prime Minister Shehbaz Sharif, the federal cabinet, Deputy Prime Minister Ishaq Dar and Chief of Defence Forces Field Marshal Asim Munir for their guidance and support during the process.
Recalling PIA’s decline, Ali said the airline once operated around 50 aircraft, a number that should have doubled by now, but currently stands at just 18 planes.
“We reached this stage because several mistakes have been committed in the past,” he said, adding that running commercial businesses is not the government’s role. “The private sector is best suited to run such enterprises.”
Responding to criticism that the government would receive only Rs10 billion from the deal, Ali said this was a misinterpretation. He explained that while 7.5 per cent of the bid amount would come as cash, the government would also retain equity worth Rs45 billion, bringing the total value to Rs55 billion. The remaining funds, around Rs125 billion, would be injected directly into the airline.
“In total, the valuation of PIA is Rs180 billion,” he said.
Ali noted that between 2015 and 2024, PIA incurred losses of nearly Rs500 billion, making it unattractive to investors without restructuring. He defended the government’s decision to remove long-term debt from the airline, saying no buyer would have invested otherwise.
“We haven’t lost our pride,” he said. “There is no pride in owning an airline that cannot fly.”
Referring to statements by Arif Habib Corporation, Ali said the new owners plan to expand PIA’s fleet to around 65 aircraft within four years, signalling a shift toward growth and improved service quality.
The adviser said the airline had been privatised at the “right time,” expressing hope that private investment and professional management would finally put PIA on a sustainable and profitable footing.