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- Bidders are waiting for airline’s latest audited accounts, clarity on flights to Europe that are banned, says Bloomberg
- Pakistan is looking to sell 51 percent to 100 percent of the carrier, which has failed to report an annual profit for nearly two decades
ISLAMABAD: Pakistan’s government has delayed the final auction for its national airline until the end of September, international business publication Bloomberg reported this week, as potential bidders seek more information to assess the carrier.
Islamabad plans to sell the Pakistan International Airline (PIA) and outsource three of its airports in its attempts to curtail losses and enhance its foreign exchange reserves at a time when the country’s fragile $350 billion economy faces a balance of payment crisis.
The privatization of the loss-making state-owned enterprise has long been on the International Monetary Fund’s (IMF) list of recommendations for Pakistan, with which it signed a $7 billion loan agreement this month. Pakistan’s government said in July it expected to announce the auction date within 10 days.
“Pakistan has delayed the final auction for state-owned Pakistan International Airlines by two months until the end of September after potential bidders sought more information to assess the carrier, according to people familiar with the matter,” Bloomberg reported on Monday.
Quoting anonymous sources familiar with the matter, Bloomberg said the bidders are waiting for the airline’s latest audited accounts, clarity on flights to Europe that are banned and aircraft lease agreements.
The European Union Aviation Safety Agency (EASA) banned PIA from its most lucrative routes in Europe and Britain after a PIA plane crash in Karachi in 2020 killed nearly 100, followed by a scandal over pilot licenses. The ban continues, costing the airline annual revenue of nearly 40 billion rupees ($143.73 million), the government has told parliament.
Pakistan is looking to sell 51 percent to 100 percent of the carrier, which has failed to report an annual profit for nearly two decades. In June, Pakistan selected six bidders to bid for the airline, which includes a consortium led by the Yunus Brothers Group., one of the nation’s largest business conglomerates, and another by businessman Arif Habib.
A popular airline during its heydays in the ‘60s and ‘70s, PIA has grappled with financial losses, mismanagement, and operational challenges in recent years. It has also been burdened by a high debt load, inefficiencies, and corruption allegations, resulting in an overall decline in its financial performance.
Previous Pakistani governments avoided disposing the flag carrier as a potentially highly unpopular move. However, Pakistan’s recent macroeconomic crisis and its desperate need to secure another financial assistance package from the IMF has forced the government to go ahead with the auction.