In a significant development regarding the privatization of Pakistan International Airlines (PIA), the federal government has approved a revised business plan that will be shared with four pre-qualified local consortiums this week. The process marks a renewed effort to restructure and offload the national carrier, which has faced severe financial and operational challenges in recent years.
Reserve Price Likely to Remain Unchanged
According to official sources, the final approval of the reserve price for PIA’s privatization will be taken by the Privatization Committee. Given the current financial condition of PIA, the reserve price may be retained at the level set during the previous bidding phase to ensure competitiveness and interest from potential buyers.
New Business Plan: Key Highlights
The new business plan, approved by the government, reflects several significant changes from previous versions. It has been developed to make the offer more attractive and financially viable for interested buyers.
Among the key updates:
- The number of residential flats to be handed over to the winning bidder has been increased from 19 to 40.
- The number of PIA employees will be reduced to 6,800, reflecting a substantial downsizing from earlier staffing levels.
- This revised plan aims to streamline operations and reduce the burden on the new management team.
The business plan will be shared with the four pre-qualified consortiums, which are expected to implement the proposed operational structure upon acquisition. These parties will be briefed on the legal framework, technical requirements, and other relevant issues associated with the handover.
Access to Virtual Data Room and Legal Briefings
Beginning tomorrow, access to a virtual data room will be granted to the four selected consortiums. This digital platform will allow pre-qualified parties to review critical financial, legal, and operational data related to PIA, enabling them to make informed decisions during the bidding process.
The Secretary of the Privatization Commission confirmed that comprehensive legal briefings and consultations will also be provided to these parties to ensure complete transparency and clarity.
No Interest from International Bidders
Despite outreach efforts, no international bidders have expressed formal interest in acquiring PIA. However, government officials maintain that the local pre-qualified consortiums possess both the financial strength and managerial capacity to successfully operate and revive the airline.
This shift in focus from international to domestic buyers is viewed as a practical approach, given the complex regulatory environment and localized challenges associated with operating a national carrier.
Political Insights and Air Punjab Mention
During a recent committee meeting, Committee Chairman Farooq Sattar raised a question about previous statements made by the Chief Minister of Punjab, who had hinted at an interest in acquiring PIA. Responding to this, the Secretary of the Privatization Commission clarified that the Chief Minister likely has plans to launch a separate airline under the name “Air Punjab”, rather than pursuing the acquisition of PIA.
This statement further emphasizes the government’s focus on local privatization and strategic restructuring of the national airline rather than political involvement or public-sector ownership at the provincial level.
Government to Retain 15% Shares
As part of the privatization structure, the federal government has decided to retain a 15% stake in the proceeds received from the sale of PIA. This retained share is intended to safeguard national interests and maintain a minor strategic role in the future governance or oversight of the airline.
Call for Gradual Transition for Employees
Addressing concerns over the downsizing of PIA’s workforce, the Chairman of the Committee recommended that instead of abrupt dismissals, a transition period of 3 to 5 years should be given to affected employees. This would allow them to adjust to the new environment, seek alternative employment, or benefit from rehabilitation and training programs.
The government is reportedly considering this recommendation and may include a gradual workforce adjustment plan as part of the final sale agreement to ensure minimal social disruption.
Privatization Timeline
The privatization of PIA is expected to be completed in the last quarter of this year, marking a major milestone in Pakistan’s ongoing economic reform and public sector restructuring program.
The privatization of PIA is entering its final stages with a revamped business plan, focus on local consortiums, and a clear strategy to offload the financial burden of a loss-making national carrier. With the reserve price under committee review and employee transition concerns under discussion, the coming weeks will be crucial in determining the future of Pakistan’s flag carrier.
