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Govt to set up PIA Holding Company to pace up privatization of the national airline

A statement from the prime minister’s office outlined that the approved plan will bifurcate PIA into two companies: TopCo and HoldCo.

ISLAMABAD: In a significant move toward privatization, the government has approved the establishment of the Pakistan International Airlines holding company.

The federal cabinet granted approval during a meeting held on Wednesday to pace up the privatization process of the national airline.

According to the cabinet decision, the chief executive officer of PIA will assume leadership of the holding company temporarily.

Prime Minister Shehbaz Sharif has urged for an expedited process of privatizing the national flag carrier. He has also instructed authorities to present a plan for the outsourcing of airports across the country.

A report revealed that the interim cabinet had endorsed the recommendation of Pakistan’s Privatization Commission, tasked with divesting all financially struggling state-owned enterprises (SOEs).

The restructuring plan entails dividing PIA into two entities. One, considered ‘clean,’ will be put up for sale, while the other will be housed within a holding company burdened with legacy debt amounting to Rs825 billion ($2.95 billion) in loans, creditors’ funds, and losses.

A statement from the prime minister’s office outlined that the approved plan will bifurcate PIA into two companies: TopCo and HoldCo.

Meanwhile, the prolonged delay in the privatization of Pakistan International Airline (PIA) has created a significant strain on the operational dynamics of the national carrier, with reports indicating that nine aircraft are currently grounded.

Among the fleet of 31 planes, nine aircraft, including five Airbus-320, three Boeing-777, and one ATR craft, are out of service due to the unavailability of essential spare parts.

This development raises concerns about the immediate future of the national airline, which heavily relies on the support of the State Bank of Pakistan. Adding to the challenges, leasing companies are expressing reservations, citing Pakistan’s CCC rating in relation to business policies.

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I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.

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