ISLAMABAD: The privatization of Pakistan International Airlines (PIA) faces new challenges as pre-qualified bidders demand full ownership of the airline, according to recent reports. This comes shortly after Finance Minister Muhammad Aurangzeb assured that PIA’s privatization would be completed within the year. Initially attracted by a 60% stake offer, the six interested parties are now calling for complete control, citing concerns over financial liabilities, fleet age, and operational difficulties.
The bidders have expressed unease over several critical issues, including the airline’s ageing fleet and substantial debt, which are threatening the success of the sale. PIA is currently burdened with approximately Rs200 billion in liabilities, making any investment risky without full management and profit-loss control. The bidders argue that with only a partial stake, the risks outweigh the rewards, particularly since the airline’s wide-body fleet is set to retire over the next two years. The government has requested $500 million for the replacement of these retiring aircraft, a condition bidders find unfeasible without full ownership.
Moreover, PIA’s smaller planes are leased, meaning new investors would need to overhaul the fleet, adding to the operational challenges. Bidders have also raised concerns about the suspension of PIA’s international routes, particularly to Europe and the United States. They warn that without the restoration of these routes, transforming the airline into a profitable venture will be exceedingly difficult.
Adding to the uncertainty, the Privatisation Commission recently proposed selling 76% of PIA’s shares, although the bidders claim they have not received official notification about this new offer. Concerns over the country’s open skies policy, which allows international carriers to operate freely, have also been raised. Bidders worry that without protection from foreign competition, PIA’s recovery potential is limited.
Additionally, the bidders have expressed reluctance to inherit the airline’s large workforce, citing overstaffing and demands to retain employees for at least three years. They are also seeking clarity on legal protections and pensions.
Originally scheduled for October 1, the financial bidding process has been postponed to October 31. Despite assurances from the government, the future of PIA’s privatization remains uncertain amid ongoing negotiations.
