PIA to be handed over to new owners this month

• All local, international regulatory approvals completed, adviser says
• Islamabad airport privatisation planned during FY27
• Karachi, Lahore airport outsourcing process to begin immediately
• Five Discos targeted for sale or concession

ISLAMABAD: Pakistan International Airlines will be fully and formally handed over to its new owners before the end of the current month, completing a privatisation transaction that had been delayed for months after bidding in December last year because of global regulatory requirements.

“It will be handed over to the new buyers by the end of this month,” Prime Minister’s Adviser on Privatisation Muhammad Ali told Dawn over the weekend, adding that all local and international regulatory approvals had now been completed.

Ali said the national flag carrier’s operating rights in various countries had to be transferred to the privatised operator, requiring several regulatory processes, which had now been completed. The local law relating to PIA’s conversion into a public limited entity also stood amended.

Responding to a question, he said PIA’s decision-making remained in the public sector for now, but under the sale and purchase agreement, the private owners were fully on board on all operational and financial decisions.

He said the exemption of equipment, accessories and lease and purchase of aircraft from taxes for 15 years after privatisation had been cleared by the International Monetary Fund to facilitate the transaction and given legal cover in the Finance Bill 2026-27.

Ali conceded that the same tax treatment was not currently available to other airlines because the IMF’s consent was limited to PIA. For other operators, the government would again take up the matter with the Fund for equitable treatment, he said.

Interestingly, the IMF has consistently demanded removal of policy distortions to improve ease of doing business, but in this case allowed a major policy distortion to the disadvantage of other airlines operating in and from the country.

At the post-budget press conference, Finance Secretary Imdadullah Bosal had also said special tax exemptions for PIA were part of the privatisation agreement and could not be extended to other operators at this stage. Parliamentary committees have also objected to the discriminatory treatment during debate on the Finance Bill 2026-27 and asked the government to provide a fair and equitable environment to all operators.

In response to a question, Ali said Islamabad International Airport would be privatised during FY2026-27, for which the Asian Development Bank had been selected as transaction adviser with certain changes in contract conditions. The Manila-based lending agency would be formally appointed as transaction adviser very soon after approval by the Cabinet Committee on Privatisation, he said.

He said the process for hiring financial advisers for outsourcing Karachi and Lahore international airports would begin immediately, as previous government-to-government discussions had not progressed as desired. Both airports were expected to attract more than $500 million each in fresh investment, he added.

Ali said the target for major sale transactions during FY27 included five power distribution companies in two lots. The sale of Faisalabad, Gujranwala and Islamabad Discos is expected in October, November and December this year, followed by long-term concessions for Hyderabad and Sukkur Discos.

In addition, Islamabad International Airport, Zarai Taraqiati Bank Ltd and House Building Finance Corporation are also expected to be completed well before June 2027, he said.

An Arif Habib-led consortium had secured 75 per cent shares in PIA in December last year at a bid price of Rs135bn, most of it meant for investment within the airline. Fauji Fertiliser Company, which was originally a competing bidder, sidestepped the bidding and later became part of the transaction with an additional 25pc share acquired by the consortium, becoming the second-largest shareholder.Under the latest shareholding pattern, Arif Habib’s Fatima Fertiliser is the lead owner with a 34.1pc stake, followed closely by Fauji Fertiliser with 33.9pc. Lake City holds 16pc, while City Schools and AKD Group together hold 16pc. The consortium will now have 100pc control of the national flag carrier.

Published in Dawn, June 22nd, 2026 ...