Cash strapped Pakistan International Airlines will soon get a new owner. The Pakistan government is planning to sell the majority stake in the airline on October 31, 2024. According to sources, only one bidder has submitted the prequalification documents for the privatisation of the airlines.
Prior to this deal, about six companies were pre-qualified to bid for 60 per cent stake in PIA. They were — Fly Jinnah, AirBlue, Arif Habib Corporation, and three consortia led by YB Holdings (Private) Limited, Pak Ethanol, and Blue World City. Of these five companies have withdrawn their bids, leaving only one company in the fray.
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The reason behind the withdrawal of five companies is said to be the demand of complete ownership of PIA and not just 60 per cent stake. In response to this demand, the Pakistani government increased its offer only to a 76 per cent stake, post which only one group was left as the bidder. The parties that withdrew have cited concerns like airline’s financial liabilities, outdated fleet, and operational difficulties.
The PIA has been in financial crisis since many years now. The issues came to the fore in 2023 when 7000 employees of PIA did not receive their salaries for November 2023. Prior to this, the European Union banned PIA in 2020 over safety concerns.
Apart from this the issue of fake pilot licences in PIA and other airlines in Pakistan was also a matter of great concern leading to safety protocols and passenger safety.
Currently, the PIA has 32 aircraft in its fleet, but the deteriorating condition of the fleet, lack of proper maintenance and overall operational inefficiency will call for an investment of over $500 million for fleet renewal and operations.