Privatization of Pakistan International Airlines has picked up pace in the past few weeks. The management of the flag carrier is meeting on short notice next week to discuss the sale.
While some advocate for selling PIA to the highest bidder for maximum profit in dollar terms, a few analysts emphasized caution over a hastened sale. Finance Minister Muhammad Aurangzeb said last week the federal government wants to be done with the PIA sale by June 2024.
A key concern is the potential outflow of profits and royalties if PIA is sold off to a foreign buyer. While the sale would reap short-term dollar inflows and clear the burden off the state debt pile, giving ownership to a domestic buyer or a consortium of local investors would be more beneficial.
Maintaining local control over PIA will safeguard our national interests. But outside investments cannot be entirely ruled out and both political feelings and gossip differ on the extent to which foreign buyers can be involved.
“Sell non-controlling shares to foreign groups in partnership while retaining management rights. Simply avoid foreign ownership to prevent route and asset sell-offs. The stock is historically toxic but has shown massive growth in the past 6 months too quickly to call it junk. Don’t lose control,” someone privy to the privatization process told ProPakistani.
PIA rose 15 percent this week, bringing its total gain in the past year to almost 630 percent.
Regardless, facts don’t care about our feelings, and the operational challenges facing PIA cannot be overlooked. Even if sold at a high valuation, sustaining airline operations requires big money. Are local investors or businesses capable of effectively managing PIA’s operations in the long run? Logic says no.
Key Risk vs. Institutional Stability
Recent experiences with privatization highlight the risk associated with relying on individual sponsors. If the federal government still wants a foreign buyer in charge in exchange for a share in future profits, then it should be carefully examined which foreign groups have established operational frameworks and what they can offer.
Too late?
Questions arise regarding the government’s role in the PIA privatization process and the decision-making structure. History is important and mistakes of the past shouldn’t be repeated.
But repeating mistakes is second nature to our system. Last week a meeting of the steering committee on outsourcing Islamabad, Karachi and Lahore airports was held under the chairmanship of Foreign Minister Ishaq Dar. In principle, this move undermines a sitting Finance Minister and creates decision-making problems that could push current plans of selling off PIA beyond 2024.
Finance Minister Muhammad Aurangzeb’s reduced influence in key committees raises concerns about effective policymaking and implementation, particularly regarding critical issues like debt restructuring and interest rates. Please note that Aurangzeb is a seasoned banker and recipient of high praise from local commentators on X.
Past attempts to sell PIA were unsuccessful due to a multitude of factors and Ishaq Dar was responsible for some of them. During this time, the flag carrier had to reduce operations due to crippling financial health.
The privatization of PIA presents a complex dilemma. While hoping for big profits isn’t a crime, ensuring operational health is equally imperative. Striking the right balance between foreign investment and local control, coupled with effective government oversight, will be crucial in determining the success rate of PIA’s privatization.
Dar trying to get in on the act… Can only be trying to get in on the payola action.
are you mad “sale would reap short-term dollar inflows” it will bring nothing PIA has billion of loses it will bring nothing even free it should be sold
Totally agree. PIA value is ZERO currently as it is under debt that is more than the total value. Also PIA is filled with political appointees. These political appointees have destroyed this airline already. Time to give it away to any professional so that it can really work.
It is full of useless sifarishees hired by his highness asif zardari and it should be sold and all those bumbling idiotsvfired
Jab politically jobs do Jane ki TU Kasi bi department k yeh hee Hal ho k
Do you want to sell it to PIA administration again?
For God’s sake, sell it to an efficient foreigner. Get rid of it.
Please name a single enterprise run by the locals that has done good to the country and it’s people.
Agree with you local will want subsidy again just get rid of it government cannot run any business properly due to so much parties involved.
Dell it dont read propk rubbish
Nah, sell to sir Richard Branson. Needs to be a foreigner. Local will just keep same planes. Foreigners will upgrade the fleet.
Bhai jan problem kya hai. All that is reqiired is “NO DAR BULLSHIT” Secondly, get the job done by professionals. Trouble is at every stage their is an interest. How to make money. Keep matter simple. Make a “privatisation board” with unblemished record. That board will have all the powers for privatisation. No interference by these politicians, goons like Dar and the entire inner circle of PML(N) should stay out of this and all privatisation to be done by the board.
Absolutely agree with you the problem is they make money and pass some of the loot to the big guns in the establishment and everything is hunky dory and kosher Bhaiya Iran wala inqilab ki zaroorat hai or China model or bring in the Taliban. At the present status as it is going on nothing will change
PTCL was privatized a long time ago. The case of PTCL pensioners is still pending. Love the rule of law in this country. Most of the pensioners are dead and others will die in next 5 to 10 years waiting for their rightful pensions.
Not saying privatization of PIA is good or bad, but the employees will suffer for sure.
Foreigner ko sale kar do local se bhata lena asaan ho ga foreigner se mushkil ya pata chalta nehen hey kia pata foreigner se bhi bhata demand kar len kon bewaquf pakistan main investment karey ga everyone know yahan kia ho raha hey
Please sale p I a only to Pakistanis.
Selling off NATIONAL FLAG CARRIER MEANS SELLING OFF PAKISTAN TO FOREIGNERS BY THE TRAITORS OF PAKISTAN.
Please refrain from adding a political angle to an otherwise sensible post. Mentioning Dar with no other details was totally uncalled for. Already people are bombarded with 100s of hours long programs on shallow political party related issues instead of the country.
Sell this shit ASAP
PIA Should be sold to foreign buyers as otherwise selling to local buyers is going to screw it up again because there will be too much interference by the gov’t and establishments and so called called influentials and it is because of them that the once good airline has suffered tremendously.
The decision of selling PIA should be based on one point agenda and that is national interest. Selling to foreighner may yield some foreigne exchange but in the long run Pakistani nation will have to pay.w
The airline business model is highly complex, and creating a new airline is much easier than revamping an existing one. The locals lack the necessary skills and financial resources to sustain future financial obligations. To succeed, it is essential to add new aircraft to the fleet, but this is beyond the capacity of local investors if the goal is to have a fleet size of 200+ aircraft. Moreover, success requires not only financials but also an out-of-the-box approach that also requires a diverse workforce comprising both local and foreign employees.
Finance Minister is 100% correct.
Air Blue can buy PIA, becoz it is backed by N.S.
Very well written article. As a Senior citizen, I am demoralized to see the present day condition of the National Flag Carrier. It was in the 60’s truly “Great people to fly with”. Having travelled in B720’s and the Fokker Friendships – right from the Cabin crew down to the Pilots + ground staff, they were really “great people”. We miss you – the late Air Marshal Nur Khan and Omer Kureishi !