Pakistan Sells Majority Stake in PIA for US$482M

‍ISLAMABAD — Pakistan International Airlines (PIA) has been sold to a consortium led by the Arif Habib Group after it submitted the highest bid of US$482 million for the national flag carrier.

Three bidders took part in the process: the Arif Habib–led consortium, Lucky Cement, and Airblue.

Airblue offered PKR26.5 billion (US$94 million), while Lucky Cement initially bid PKR 115 billion (US$409 million). The Arif Habib–led group topped both with an offer of PKR135 billion (US$482 million).

The government will keep a 25% stake in PIA, while 75% of the airline has been privatised, giving the new owners management control.

Only about 7.5% of the bid amount will go to the government in cash. Most of the funds will instead be reinvested in PIA, primarily for fleet upgrades, operations, and financial cleanup.

Earlier Privatisation Efforts

The sale follows a failed privatisation attempt last year, when bids came in below the government’s reserve price. After that, the government restructured PIA’s liabilities and shifted much of the airline’s legacy debt off its balance sheet, making it more attractive to buyers.

PIA has been a long-running burden on the state, posting heavy losses and building up hundreds of billions of rupees in liabilities. 

The airline was previously banned from flying to the United States and Europe over safety concerns. While it has since resumed flights to Europe, it remains barred from operating routes to the US.