Pakistan International Airlines (PIA) may finally be heading towards privatization.
According to Reuters, the country’s caretaker administration, which has been in place since August 2023 with a view to organizing the next general election, has finalized the details for the sale of the Pakistan’s flag carrier.
The sale has long been under discussion as the country has struggled to restructure its public finances. So far, though, all previous governments have shied away from making a decision about the airline’s future.
Although the final formula and price of the sale are not yet known, it is expected that the transaction will take into consideration the recommendations of advisory firm Ernst & Young, which delivered a 1,100-page report to the government in December 2023.
Loss-making PIA has debts amounting to 785 billion Pakistani rupees (around US$2.8 billion), which are set to be parked in a separate entity in order to sell the rest of the airline free of liabilities.
The new government has also introduced legal changes that will allow it to sell off its majority stake in the company.
In the meantime, the government will need to inject another 23.7 billion Pakistani rupees (around US$85 million) into the airline to keep it afloat for five to six months before the sale can be completed, according to Reuters quoting unnamed PIA sources.
The privatization of PIA is also expected to facilitate negotiations between Pakistan and the International Monetary Fund (IMF) with regards to future financial assistance packages.
