The Pakistani government is looking to privatise PIA – Pakistan International Airlines (PK, Karachi Int’l) before the parliamentary elections set to take place in summer 2018, privatization minister Daniyal Aziz told Reuters this week.
In order to make the heavily indebted and loss-making airline more attractive to prospective buyers, the government plans to first hive off all non-core assets, including hotel, catering, and maintenance units.
According to Reuters, PIA had debts estimated at PKR186 billion (USD1.69 billion) at the end of 2016 and in early 2017 was losing about USD30 million a month.
Before privatization is possible, the government must first change the current law adopted in 2016 which effectively bans the privatization of PIA. This can be done within a matter of days, Aziz said.
The ruling Pakistan Muslim League-Nawaz party came to power in 2013 promising widespread privatization, including the flag carrier. The sale of 68 state-owned companies was also a part of the austerity plan approved by the International Monetary Fund in return for a USD6.7 billion bailout. However, the privatization of the airline stalled in 2016 after massive union protests, which subsequently led to the adoption of the new law.
Before the new legislation was passed in 2016, Emirates and Etihad Airways had reportedly been interested in acquiring a stake in PIA.