Govt Requires New PIA Buyer to Invest Rs. 60–70 Billion Over Five Years
The federal government is seeking a long-term financial commitment from prospective buyers of Pakistan International Airlines (PIA), requiring an investment of Rs. 60–70 billion over five years to support the airline’s financial recovery, operational upgrades, and fleet expansion.
According to Privatization Secretary Usman Bajwa, the buyer will retain 85 percent of the bid amount for reinvestment into PIA, while the government will receive only 15 percent of the proceeds. Final investment figures will be determined after audited financials for FY2023–24 are released in mid-August.
Key Conditions for New Ownership
The new investor must commit to doubling PIA’s fleet within five years. The condition reflects the government’s goal to revive the national carrier as a viable and competitive airline in the region.
“Investment estimates will be finalized after the audit is complete,” said Advisor to the Prime Minister on Privatization Muhammad Ali.
Security, Financial, and Operational Challenges
The Senate Standing Committee on Privatization was informed that previous reports of Rs. 26 billion profit were misleading, stemming from a one-off accounting adjustment. In reality, PIA posted a net loss of Rs. 4.6 billion in FY2023.
Officials also confirmed that security-related challenges, particularly on North American routes, are currently being addressed as part of the reform plan.
Privatization Plan: What’s on Offer?
-
Equity Offering: 51% to 100% shares, including management control
-
Previous Reserve Price: Rs. 85 billion
-
Last Year’s Bid: Only Rs. 10 billion was offered in the previous attempt
-
Minimum Past Investment Requirement: $300 million (in a failed bid)
Due diligence is currently underway, with pre-qualified firms scheduled for site visits and technical briefings next week.
Looking Ahead
As the government intensifies efforts to revive and privatize PIA, this fresh approach—centered around strategic investment and operational revival—aims to restore public confidence and align the national carrier with global aviation standards.
The upcoming financial audit will play a pivotal role in shaping the final terms of the transaction and gauging investor interest.
