Pakistan seeks to sell loss-making flag carrier PIA to other countries

Last Updated on November 16, 2024 5:29 am

The nation failed to sell the airline earlier this month after the sole bid it received in the auction was rejected for being 8.5 times below the minimum price.

Pakistan has decided to offer its unprofitable flag carrier to other countries in a direct sale deal as one option after a failed attempt.

The government will sell Pakistan International Airlines Corp. through a government-to-government deal or privatization process, the Cabinet Committee on Privatisation said in a statement. The nation failed to sell the airline earlier this month after the sole bid it received in the auction was rejected for being 8.5 times below the minimum price.

Prime Minister Shehbaz Sharif’s government has committed to the International Monetary Fund to restructure or offload state-owned loss-making entities to reduce the financial burden as part of a $7 billion loan agreement. The national airline has not made a profit in almost two decades and is only able to operate because of regular bailouts from the government.

The government has also indicated that it may make the airline entirely debt-free in the next sale attempt. Pakistan moved about three-fourths of the airline’s total debt of 830 billion rupees ($3 billion) to government books in the previous sale attempt.

Pakistan shortlisted six local groups to participate in the auction but only one group Blue World decided to bid. Air Arabia’s local subsidiary Fly Jinnah was one of the six interested groups. Pakistan has close ties with United Arab Emirates, Saudi Arabia, Qatar and China that have helped the nation with cash bailouts in the past.

The cabinet panel also formed a committee to evaluate possible transaction options and modes for privatization of Roosevelt Hotel in New York that is owned by Pakistan.