The loss-making Pakistan International Airlines (PIA) is giving sleepless nights to the Pakistan caretaker government. (Image: Reuters)
The Pakistan government wants to privatise the Pakistan International Airlines (PIA) so that it can send funds to vital sectors.
Pakistan privatisation minister Fawad Hassan Fawad this week reiterated that the Pakistan government remains firm in its decision to divest the major loss-making state-owned enterprises, including the Pakistan International Airlines, to avoid the ongoing substantial financial drain of resources. He said the government is focusing on making the state-owned enterprises functional and efficient.
Fawad met with the World Bank resident director Najy Benhassine and discussed with him the privatisation agenda. The focus of the discussion was the divestment of the PIA and other state owned enterprises. The minister focused on the privatisation of ex-Wapda distribution companies (Discos) for their efficient working.
During the meeting, the minister outlined to Benhassine the PIA sell-off plan. He said the government wants to engage the World Bank in the process along with other financial institutions during the initial phases. He said that the government wants to develop a comprehensive model for PIA and wants the global lender to remain as a key partner for potential future support.
The Dawn in a report said that the single-agenda meeting of the board of the Privatisation Commission would discuss the privatisation of PIA on Friday. The government is prioritising the privatisation of the PIA due to “its persistent and staggering financial losses” which is “amounting to billions of Pakistani rupees annually”.
Earlier in September, the officials of the PIA said that the airline is struggling to stay afloat and has limited funds to run operations for the next few months and the core functions as well as the non-core assets will be put up for sale by PIA authorities.
It owes large sums of money to creditors, aircraft lessors, fuel suppliers, insurers, international and domestic airport operators, and even the International Air Transport Association (IATA).
PIA has grounded five leased aircraft, and four more might follow. Boeing and Airbus warned they may stop supplying spare parts last month. The aviation ministry sought PKR 23 billion in funding and requested the suspension of duties, taxes and service charges to domestic agencies, in order to stay afloat.
The officials believe that it is imperative to privatise the airline as soon as possible to end these losses and strengthen the operational efficiency of the Pakistani national carrier.
Fawad said one of the main objectives to be achieved through this exercise is to attract much-needed private investment through the privatisation process and unlocking government funds for deployment in vital sectors.
