Pakistani firm wins auction for majority stake in state airline PIA

ISLAMABAD: A Pakistani firm on Tuesday (Dec 23) won an auction with a US$482 million bid for a majority stake in the loss-making national carrier Pakistan International Airlines (PIA), in a deal seen as a key test of the government’s privatisation drive.

The Arif Habib investment group emerged as the highest bidder, offering 135 billion rupees for a 75 percent stake in PIA, with an option to buy the remaining 25 percent in the coming months. The auction was carried live by state broadcasters, with three Pakistani firms participating.

Prime Minister Shehbaz Sharif said transparency was critical given the scale of the transaction. “It was essential to make this process transparent because the biggest transaction of Pakistan’s history is about to take place,” he told his cabinet as the bidding began.

COMPETITIVE BIDDING

Two other bidders took part in the auction. A consortium led by Lucky Cement offered 134 billion rupees, while private carrier Air Blue bid 26.5 billion rupees.

The sale follows a failed privatisation attempt last year, when the government received just one bid of US$36 million, far below its target range of US$300 million to US$305 million.

PIA has long been criticised for bloated staffing, mismanagement and persistent losses. Before being delisted from the Pakistan Stock Exchange, the airline reported a net loss of US$437 million for 2022 on revenue of US$854 million.