“Pakistan’s Bid to Privatize Debt-Laden Airline Falters with Low $36 Million Offer”
Islamabad, Pakistan — Pakistan’s bid to privatize its heavily indebted national airline, Pakistan International Airlines (PIA), faced a significant setback as the sole bid for a 60% stake in the carrier amounted to just PKR 10 billion (approximately $36 million USD). This offer, made by Blue World City, a real-estate development firm, fell well below the government’s minimum price of PKR 85 billion, as outlined by Pakistan’s Privatisation Commission. The low bid puts into question the feasibility of offloading the struggling airline, which has been saddled with debt and operational challenges for years.
Pakistan’s bid to privatize its heavily indebted national airline, Pakistan International Airlines (PIA), faced a significant setback as the sole bid for a 60% stake in the carrier amounted to just PKR 10 billion (approximately $36 million USD). This offer, made by Blue World City, a real-estate development firm, fell well below the government’s minimum price of PKR 85 billion, as outlined by Pakistan’s Privatisation Commission. The low bid puts into question the feasibility of offloading the struggling airline, which has been saddled with debt and operational challenges for years.
The bidding ceremony, held at a hotel in Islamabad and aired on state-run television, was part of Pakistan’s broader agreement with the International Monetary Fund (IMF). Under the terms of the IMF’s $7 billion aid package, Pakistan agreed to pursue the sale of loss-making state-owned enterprises, including PIA. Although six companies were initially pre-qualified to participate in the sale, only Blue World City attended the final bidding round.
During the event, Blue World City’s chairman, Saad Nazir, commented on the bid, stating, “We wish the government all the best if they don’t want to accept our bid.” Nazir added that he intends to bring in Chinese and Turkish investors with expertise in aviation, should his bid be successful. Despite this, the Privatisation Commission requested Blue World City to match the minimum price if it wants to proceed further.
PIA, which boasts an asset base valued at approximately PKR 152 billion, including aircraft and flight routes, has been struggling with significant debt and operational inefficiencies. Experts believe any new investor would need to commit substantial funds to revitalize the airline, which suffers from an aging fleet, mounting losses, and a sizable workforce. The airline employs around 7,100 people, including 2,400 who work on a daily-wage basis—a factor that has further complicated privatization efforts.
Adding to PIA’s woes is its ban on flights to the European Union, imposed in 2020 over concerns regarding pilot certification. EU aviation regulators found that several PIA pilots held questionable licenses, raising safety concerns. The European Union’s ban remains in place, further diminishing PIA’s appeal to potential investors.
As Pakistan explores privatization options to reduce fiscal strain, PIA’s fate hangs in the balance. While Blue World City’s bid has cast doubt on the airline’s marketability, the government may have to re-evaluate its terms or seek alternative strategies to fulfill its IMF commitments and revive the national carrier.
Sources By Agencies
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