KARACHI: In a bold move aimed at addressing financial challenges and adhering to stringent conditions set forth by the International Monetary Fund (IMF), the Pakistan International Airlines (PIA) Board of Directors has approved significant reforms for restructuring and privatization. These reforms include the establishment of two separate entities, marking a pivotal step in the airline’s restructuring efforts.
The decision to restructure PIA comes as part of efforts to meet the conditions outlined by the IMF, which includes the privatization of state-owned entities, including PIA. With mounting financial pressures, PIA is faced with the daunting task of settling debts amounting to over 700 billion rupees owed to various institutions. Notably, outstanding dues of approximately 300 billion rupees are owed to entities such as the Pakistan State Oil (PSO) and the Federal Board of Revenue (FBR), with an additional sum of 270 billion rupees owed to commercial banks.
In light of these financial constraints, the PIA Board of Directors has taken proactive measures, including presenting a comprehensive restructuring plan to the Securities & Exchange Commission of Pakistan (SECP). Furthermore, discussions have been held regarding recommendations for the future of PIA employees, with considerations made for employees with four or more years of service who may be eligible for retirement.
The proposal for voluntary retirement before dismissal has also been deliberated upon, reflecting the airline’s commitment to addressing its workforce dynamics amidst the ongoing restructuring process.
It’s worth noting that the PIA board had been inactive since October 2023; however, recent developments saw the federal cabinet granting approval for the appointment of a new board of directors for PIA.
Concurrently, the government has initiated steps to hand over the operations and management of Karachi, Islamabad, and Lahore airports, to bolster foreign exchange reserves and support the economy.
Following approval by the federal cabinet, a notification for the formation of the committee has been issued. The committee, chaired by Federal Minister of Defense and Aviation Khawaja Asif Ahmad, includes Foreign Minister Ishaq Dar and Federal Minister of Privatization Aleem Khan among its members.
The committee will review the outsourcing of management for major airports and monitor matters related to PIA privatization. Finance Minister Muhammad Aurangzeb announced the government’s commitment to completing the privatization process of PIA by June, with Federal Minister for Privatization and Board of Investment Abdul Aleem Khan spearheading the efforts. Aurangzeb expressed confidence in initiating the bidding process for PIA soon.
