ISLAMABAD: The privatisation process of Pakistan International Airlines formally moved into the bidding stage on Tuesday as three pre-qualified bidders submitted offers to acquire a majority stake in the national flag carrier. The development marks a key step in the government’s renewed effort to offload the struggling airline under its broader economic reform agenda.
The bidders include a consortium led by Lucky Cement Limited, joined by Hub Power Holdings Limited, Kohat Cement Company Limited and investment firm Metro Ventures. Another consortium is led by Arif Habib Corporation Limited, with Fatima Fertiliser Company Limited, City Schools and Lake City Holdings Limited as partners. The third bidder is private airline Air Blue (Private) Ltd.
Televised auction follows failed privatisation attempt
This auction represents Pakistan’s second televised attempt to privatise PIA after last year’s process collapsed when only one bid was received. That offer fell well below the government’s reference price, derailing what would have been the country’s first major privatisation in nearly two decades.
On Tuesday, representatives of the bidding groups arrived one by one to submit sealed offers in a transparent box during a live broadcast on state television. The bids are scheduled to be opened at a ceremony starting at 3:30 pm in the presence of all bidders. Officials confirmed that the process includes two phases, with a second open-bidding ceremony planned later in the day.
Prime Minister Shehbaz Sharif welcomed the proceedings and praised the transparency of the process. He thanked the ministers and the Privatisation Commission leadership and urged cabinet members to attend the second ceremony.
Ownership structure and payment terms outlined
Meanwhile, Fauji Fertiliser Company Limited, once seen as a leading contender for a 75% stake, formally withdrew from the bidding last week. Under the transaction structure, 92.5% of the amount paid for the 75% stake will be injected into PIA, while 7.5% will go to the government. The state will retain a 25% stake, which bidders may choose to acquire later or leave with the government.
Officials said the structure allows flexibility for bidders seeking either partial or full ownership. The winning bidder must pay two-thirds of the bid amount within 90 days, with the remaining one-third payable within 12 months.
Employee safeguards and improved outlook
The government has guaranteed 12 months of job security for PIA employees. Pension liabilities and post-retirement benefits will remain with the holding company, while the new owners will cover salaries and current benefits.
PIA operates flights to 78 destinations and controls around 170 landing slots globally. The airline’s outlook has improved after the government absorbed most of its legacy debt, PIA recorded its first pre-tax profit in two decades, and Britain and the European Union lifted a five-year flight ban.
The sale forms part of Pakistan’s IMF-backed privatisation drive, which also targets state-owned banks, power companies and other loss-making entities to reduce fiscal pressure and rebuild investor confidence.
