The long-awaited privatization of Pakistan International Airlines (PIA) is expected to take place in early August 2024, according to a report published by the ARY News agency in Pakistan. Having obtained expressions of interest from several potential investors earlier in 2024, the authorities in charge of the process are understood to have selected a consortium of six companies to form a shortlist of candidates to take over the nationalized carrier.
According to sources close to the proceedings, the authorities have been engaged in the process of providing the required information and data to the consortium of shortlisted companies. This consortium consists of six parties, identified by the Business Insider publication as Air Blue, Arif Habib Corporation, Blue World City, Fly Jinnah, Pak Ethanol Consortium, and the YB Holdings Consortium.
The companies that have made it onto the shortlist making up the pre-qualified consortium will now be eligible to participate in the full bidding process for PIA. The final decision will be based on submissions received from the parties in that process.
The pathway to privatization was set out during the Privatisation Commission Board meeting, chaired by Federal Privatization Minister Aleem Khan earlier in June 2024. During that meeting, Aleem Khan reiterated the administration’s “unwavering commitment to ensuring a transparent, efficient privatization process for all state-owned enterprises that are incurring significant losses.”
To maintain the highest level of transparency, and foster confidence among stakeholders, Khan suggested broadcasting the privatization proceedings live on various media platforms – a proposal that is yet to be confirmed.
The update comes following a previous meeting back in April 2024, following which the country’s Finance Minister Muhammad Aurangzeb emphasized that the PIA privatization process was expected to be complete by the end of June or early July 2024, with Islamabad Airport potentially following suit shortly afterward onto the market.
“We will ensure the transparent and swift privatization of all loss-making institutions,” Aleem Khan was quoted as saying in the statement. “The technical and financial stability of the institutions participating in the privatization process will be taken into account. We are privatizing loss-making institutions to stabilize the national economy,” the minister added.
PIA suffered a major setback to its privatization plans back at the start of June 2024 after the European Union Commission decided to continue restrictions imposed on Pakistan-based airlines, including national carrier PIA from being permitted to fly to airports within Europe. The decision followed a detailed and lengthy safety audit carried out by the EU Air Safety Committee in November 2023 into that country’s aviation sector.
Following its review, the Committee determined that there were insufficient grounds to amend the current list of air carriers prohibited from operating within the EU. The decision had been keenly awaited by the Pakistan Civil Aviation Authority (PCAA), who had been expecting PIA to be cleared to resume flights to EU airports following the audit.
Without the clearances required to resume flying to major European hubs such as London, Paris, Frankfurt, and Amsterdam, PIA’s ability to operate on some of the routes that it historically found its most lucrative will be a point to consider before any potential investor finally commits to signing a contract to take ownership of the carrier.