PIA Set for Final Handover to Private Owners This Month

Pakistan International Airlines is expected to be formally handed over to its new private owners before the end of this month, marking one of the most consequential privatisation milestones in the country’s aviation and public-sector reform history. The development follows months of regulatory work after the sale process was delayed despite bidding having taken place last year.

According to the report, Prime Minister’s Adviser on Privatisation Muhammad Ali said all local and international regulatory approvals linked to the transaction had now been completed. The handover will transfer control of the national flag carrier to the consortium that won the transaction after earlier delays connected to operating rights and approvals in multiple jurisdictions.

The adviser said PIA’s operating rights in different countries had to be shifted to the new privatised operator before the process could be concluded. The government also completed legal changes connected to PIA’s conversion into a public limited entity, a necessary step for moving the airline out of full public-sector control.

Although the airline remains in the public sector until the formal handover, the new owners are already involved in operational and financial decision-making under the sale and purchase arrangement. This means the incoming management is being aligned with business decisions before taking full control of the carrier.

The transaction also includes major tax-related support. Exemptions on equipment, accessories and the lease or purchase of aircraft for 15 years after privatisation have been cleared with the International Monetary Fund and given legal cover in the Finance Bill 2026-27. However, the same treatment is not currently available to other local or international airlines operating in Pakistan.

The special tax arrangement has already raised concerns in policy circles because it gives the new PIA operator preferential treatment in a market where other airlines may not receive the same relief. Finance officials have acknowledged that these exemptions were part of the privatisation agreement and cannot immediately be extended to competitors without further engagement with the IMF.

The PIA deal is part of a wider privatisation push. Islamabad International Airport is planned for privatisation during fiscal year 2026-27, with the Asian Development Bank selected as transaction adviser subject to formal approval. The government also intends to begin the process of hiring financial advisers for the outsourcing of Karachi and Lahore international airports.

Officials expect both Karachi and Lahore airport outsourcing processes to attract more than $500 million each in fresh investment. In the power sector, the government is also targeting the sale or concession of five distribution companies, including Faisalabad, Gujranwala and Islamabad Discos, followed by concession plans for Hyderabad and Sukkur Discos.

The ownership structure of the privatised airline is expected to give the consortium full control. The Arif Habib-led group had secured 75 percent shares in PIA at a bid price of Rs135 billion, much of it meant for investment in the airline, while Fauji Fertiliser later became part of the arrangement with an additional 25 percent stake.

For Pakistan, the handover could reshape the future of a carrier long burdened by losses, debt, governance problems and operational weaknesses. The coming months will show whether private control can revive PIA’s financial health, improve service quality and restore confidence while also addressing competition concerns, employee issues and regulatory oversight.