Pakistan PIA Privatisation Gets Three Bids

Pakistan has received three bids for the privatisation of its national carrier, Pakistan International Airlines (PIA), as part of the government’s efforts to sell loss-making state firms. The bidding process, which was broadcast live, is seen as a crucial test of Islamabad’s ability to privatize its embattled enterprises.

The three bidding consortia, led by private Pakistani carrier Air Blue, Lucky Cement, and investment firm Arif Habib, each placed their bids for a 75% stake in PIA. The government will announce a reference price for the airline later and declare a winner if the minimum bid is met. This development comes after a previous privatisation attempt failed last year, with only one bid of $36 million, far below the government’s expected $300-305 million.

PIA has been facing significant financial challenges, with a net loss of $437,000 in 2022 on revenue of $854,000. The airline was delisted from the Pakistan stock exchange and has been struggling with safety lapses and mismanagement. In 2020, it was banned from flying to the European Union, Britain, and the United States after a fatal crash in Karachi. Although flights to Europe and Britain have resumed, operations to the US remain suspended.

The privatisation of PIA is part of a broader effort by the Pakistani government to divest dozens of its cash-burning enterprises by 2029, under a $7 billion loan programme agreed with the International Monetary Fund. Many of these companies have incurred significant losses due to mismanagement and corruption, forcing the government to provide financial support to keep them afloat.

With only 18 of its 34 planes in active service, PIA’s financial struggles have raised concerns about its viability. The successful privatisation of the airline could pave the way for the government to tackle its other loss-making enterprises. The outcome of the bidding process will be closely watched, as it could have significant implications for Pakistan’s economy and its ability to manage its state-owned enterprises.