Pakistan International Airlines’ fleet will be expanded to 64 aircraft in phases after privatization, Arif Habib, founder of Arif Habib Group, said, outlining the consortium’s plans after winning the bid for a majority stake in the national carrier.
The Arif Habib Corporation Limited-led consortium acquired a 75 percent stake in PIA with the highest bid of Rs. 135 billion in an auction held on Tuesday as part of the government’s privatization drive.
During the open auction, Arif Habib raised the bid from Rs. 115 billion to Rs. 135 billion after the Lucky Cement Limited-led consortium increased its offer from Rs. 101.5 billion to Rs. 134 billion in the second round.
“We have 90 days, and we also intend to buy the remaining 25 percent,” Habib said in an interview with a private television channel, adding that the group was interested in acquiring full ownership of the airline.
He said the government would receive Rs. 10 billion from the sale of the 75 percent stake, while the remaining 25 percent would fetch Rs. 45 billion. Habib also confirmed that Fauji Fertiliser Company Limited is part of the consortium.
Sharing operational plans, Habib said PIA’s fleet would be expanded to 38 aircraft in the first phase and further increased to 64 aircraft in the second phase. He added that the airline currently has liabilities of Rs. 190 billion, while its assets are valued at around Rs. 180 billion.
Adviser to the Prime Minister on Privatization Muhammad Ali told Reuters that the government expects the new owner to begin running the airline by April, subject to regulatory approvals.
He said the process will now move to final approvals by the Privatization Commission board and the federal cabinet, likely within days. Contract signing is expected within two weeks, followed by financial close after 90 days to meet legal and regulatory requirements.
Muhammad Ali said the transaction is structured to inject fresh capital into PIA rather than merely transfer ownership. “We did not want a situation where the government sells the airline, takes its money, and the company still collapses,” he said.
He added that safeguards have been built into the deal, including retained earnest money and an additional payment at signing, allowing the government to approach the second-highest bidder if the deal fails to close.
On labour issues, the adviser said the buyer is required to retain all employees for 12 months after the transaction on existing terms, noting that PIA’s workforce has already reduced in recent years.
The sale is being closely watched by the International Monetary Fund, which has urged Pakistan to stop losses at state-owned enterprises. Muhammad Ali said the privatization of PIA is a key test of Pakistan’s reform credibility, adding that successfully closing the deal would signal momentum for future privatizations.
What is the cost of one aircraft have to be mentioned or will they lease than what will be the benefit .
For Rs 10 billion they have managed to acquire Rs 30 billion in total equity invluding all assets and subtracting liabilities, plus 10 billion in cash, and another 14 billion in pre-payments. Let’s see if they invest 125 Rs billion in next 5 years…