First Phase of PIA Privatization Complete as 3 Bidders Enter Race

The bidding phase for the privatization of Pakistan International Airlines has officially begun, with three pre-qualified bidders submitting sealed offers to acquire a controlling stake in the national flag carrier.

The development marks the completion of the first phase of the privatization process and a key step in the government’s broader economic reform agenda. Officials said the government is expecting bids exceeding Rs. 100 billion for the sale of a 75 percent stake in PIA.

According to official details, the bidders include a consortium led by Lucky Cement Limited, Air Blue Private Limited in partnership with Lake City Holdings, and a consortium led by Arif Habib Group companies.

Fauji Fertilizer Company, previously in the running, has withdrawn from the process.

Transaction Manager Abdul Basit told the media that all shortlisted bidders were provided access to the required data room and that the bids were being verified. He explained that the process would take place in two stages, with bid submission followed by the formal opening of offers. The sealed bid box was displayed before cameras to ensure transparency.

Officials said the bids will be formally opened at 3:30 pm in Islamabad in the presence of bidders.

Advisor to the Prime Minister on Privatization Muhammad Ali said the privatization of PIA is one of the largest economic activities currently underway in the country. He noted that no major privatisation has taken place in the past two decades and expressed hope that strong bids would lead to meaningful investment in the airline.

Under the privatization structure, the government is offering 75 percent of PIA’s shares, while retaining a 25 percent stake, with the option for the successful bidder to acquire it at a later stage. Of the proceeds from the sale, 92.5 percent will be reinvested directly into PIA, while 7.5 percent will go to the government.

Officials said the privatization is being positioned as a turnaround strategy rather than a simple sell-off. A five-year business plan has already been finalised, under which most of the funds will be used to revive the airline. Key targets include expanding the fleet from 18 aircraft to around 38 over the next few years, supported by an 18 percent GST exemption on leasing new aircraft.

Passenger numbers are projected to increase from around four million to seven million annually as routes and services expand.

One of the major hurdles to the sale had been PIA’s heavy debt burden. The government has now absorbed liabilities and loans amounting to Rs. 654 billion, a move officials say was critical to restoring investor confidence.

PIA employees have been assured job security for one year after privatization. Any workforce changes beyond that period will be guided by the airline’s restructuring plan.

The Privatisation Commission said the bidding process is being conducted in a transparent and rule-based manner as part of Prime Minister Muhammad Shehbaz Sharif’s reform agenda.