National carrier Pakistan International Airlines (PIA) is expected to be led by a new owner from April 2026. It will also receive new capital as part of a deal to privatize the airline, the country’s privatization chief said on Wednesday.
A consortium led by Arif Habib Corporation emerged as the highest bidder on Tuesday, in a live televised auction for a 75% stake in PIA. This marks a major breakthrough in the government’s long-delayed privatization of the carrier.
The consortium offered 135 billion rupees, exceeding the government’s reserve price of 100 billion rupees – a turnaround from last year’s failed sale attempt.
Read: Government finally puts an end to the “white elephant” PIA
The prime minister’s adviser on privatization, Muhammad Ali, told Reuters in an online interview that the state expects a new owner to run the airline by April next year. The process moves to final approvals from the Privatization Commission’s board and cabinet, expected within days, with a contract signing likely within two weeks.
Financial close is also expected after 90 days to meet regulatory and legal conditions.
Ali said the government would receive 10 billion rupees in cash upfront, while retaining a 25% stake valued at around 45 billion rupees. The deal was structured to inject new capital into the airline rather than simply transfer ownership, he said.
“We didn’t want a situation where the government sells the airline, takes its money and the company continues to collapse,” Ali said. The winning consortium also includes fertilizer manufacturer Fatima, private school network City School and real estate company Lake City Holdings Limited.
Ali said Fauji Fertilizer Company, a military conglomerate, did not bid but could still join the winning consortium as a partner, noting that the buyer can add up to two partners – including a consortium partner or a foreign airline – if they meet the qualification criteria.
Allowing partners adds financial strength and could bring global aviation expertise, he said.
Pressure from the IMF
Ali said guarantees, including withholding of deposit and an additional payment upon signature, would allow the government to move on to the second highest bidder if the deal fails to close.
On labor, he said the buyer was expected to retain all employees for 12 months after the transaction, with unchanged contracts, adding that PIA’s workforce had already declined in recent years.
The sale is being closely monitored by the International Monetary Fund (IMF), which has pressed Pakistan to halt losses at state-owned enterprises. Ali called privatization a key test of the credibility of Pakistan’s reforms with the IMF, adding that failure to get rid of loss-making state-owned enterprises risked putting further pressure on public finances.
He said the conclusion of the deal would mark momentum towards reforms and privatizations, adding that the government was working on a pipeline of future transactions once the PIA closes.
