PIA handover to new owners expected by end of June
Dhaka: Pakistan International Airlines (PIA) will be fully and formally transferred to its new private owners before the end of June, completing a privatization deal that had been delayed for months following December bidding due to global regulatory requirements.
The Pakistani Prime Minister's Adviser on Privatization, Muhammad Ali, told a local newspaper last week that the handover would be completed by month's end, noting that all local and international regulatory approvals had now been finalized.
Ali said PIA's operating rights in various countries had to be transferred to the new operator, a process that required several regulatory steps now completed. Local law governing PIA's conversion into a public limited entity has also been amended.
He added that decision-making currently remains within the public sector, though under the sale and purchase agreement, the private owners are fully involved in all operational and financial decisions.
According to Ali, the International Monetary Fund has cleared a 15-year tax exemption on equipment, accessories, and aircraft leases and purchases following privatization, a measure that has been given legal cover under the Finance Bill 2026-27.
Ali also said Islamabad International Airport would be privatized during FY2026-27, with the Asian Development Bank selected as transaction adviser following certain changes to contract conditions. The Manila-based lender is expected to be formally appointed soon after Cabinet Committee on Privatization approval.
The hiring of financial advisers for outsourcing Karachi and Lahore international airports will begin immediately after earlier government-to-government talks failed to progress as hoped. Both airports are expected to draw more than USD 500 million each in fresh investment.
An Arif Habib-led consortium secured a 75 percent stake in PIA in December last year with a bid of PKR 135 billion, most of which is earmarked for investment within the airline. Fauji Fertiliser Company, originally a competing bidder, withdrew from the bidding process and instead joined the transaction, acquiring an additional 25 percent stake to become the second-largest shareholder.
Under the current shareholding structure, Arif Habib's Fatima Fertiliser holds the largest stake at 34.1 percent, followed closely by Fauji Fertiliser at 33.9 percent. Lake City holds 16 percent, while City Schools and AKD Group jointly hold the remaining 16 percent. The consortium will now have full control of PIA.
