Government to Hold Open Bidding for 75% PIA Stake Today

The government is set to conduct open bidding today (Tuesday) for the privatisation of 75% of shares in Pakistan International Airlines Corporation Limited (PIACL). According to the Privatisation Commission, sealed bids will be submitted by bidders at 10:30am, and the bids will be opened during a ceremony scheduled to begin at 3:30pm in the presence of the bidders.

“The reference price for the bidding will be approved by the Privatisation Commission Board and the Cabinet Committee on Privatisation after the bids are received.” Both the bids and the reference prices will be announced as part of the process, which will conclude according to the agreed-upon terms. The entire bidding process will be telecast live on television and digital media. Adviser to the Prime Minister on Privatisation, Muhammad Ali, is scheduled to hold a press conference after the conclusion of the bidding.

Three prequalified bidders have submitted the required earnest money: Airblue (Pvt) Ltd; a consortium led by Lucky Cement along with Hub Power Holdings, Kohat Cement, and Metro Ventures; and a consortium led by Arif Habib Corporation, including Fatima Fertiliser, City Schools, and Lake City Holdings. Meanwhile, Fauji Fertiliser Company Ltd, previously considered a leading contender, formally withdrew from the privatisation bidding last week.

Of the amount paid for the 75% stake, 92.5% will be invested back into PIA, while 7.5% will go to the government. The remaining 25% stake retained by the government is considered valuable, and bidders will have the option to acquire it later or leave it with the state. Officials noted that the structure accommodates bidders interested in either 75% or full ownership, adding that those who do not participate in the bidding cannot later join the winning consortium, a restriction no longer applicable to Fauji Fertiliser after its withdrawal.

Under the payment terms, the winning bidder must pay two-thirds of the bid amount within 90 days, with the remaining one-third payable within 12 months. The government has also assured 12 months of job security for PIA employees, with pension liabilities, medical benefits, and other post-retirement perks handled by the holding company, while current salaries and benefits will continue under the new ownership.

PIA currently operates flights to 78 destinations and holds about 170 landing slots worldwide. Officials emphasized that the airline urgently requires fresh investment and professional management to improve operations.

The government’s previous attempt to privatise the airline failed after a $36 million bid from a real estate firm fell short of the $305 million floor price, amid concerns over debt, staffing, and limited control. This time, the government is offering full divestment, has removed sales tax on leased aircraft, and is providing limited protection from legal and tax claims. Approximately 80% of PIA’s debt has already been transferred to the state.