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Pakistan International Airlines To Be Privatized… But Who Will Invest?
Pakistan’s government has launched a new campaign to privatize its national airline. Past efforts have proven unsuccessful, but there’s an interesting twist this time around, as the company just reported its first ”profit” in decades, and also managed to shed most of its legacy debt issues.
Pakistan’s government has launched a new campaign to privatize its national airline. Past efforts have proven unsuccessful, but there’s an interesting twist this time around, as the company just reported its first “profit” in decades, and also managed to shed most of its legacy debt issues.
Pakistan government privatizing national airline
Pakistan’s government has announced plans to urgently privatize Pakistan International Airlines (PIA). The company is seeking expressions of interest, with the hope of a private party taking anywhere from a 51% to 100% stake in the airline.
Over the past couple of years, Pakistan has secured a $7 billion International Monetary Fund (IMF) bailout, a condition of which is that the country will be more fiscally disciplined. As a result, the government has set up a committee to privatize various government assets, and PIA is among those.
We last saw efforts to privatize PIA in 2024, where the best offer was $36 million for a 60% stake in the company. The government, meanwhile, was looking for over $300 million.
Over the past couple of decades, PIA has been an absolute mess of an airline, racking up an unbelievable amount of losses. From 2020 to early 2025, the airline was even banned from the European Union, after it was discovered that many PIA pilots held fake credentials. Even beyond that, the airline has lacked financial discipline, with bloated employee numbers, an outdated and inefficient fleet, and an uncompetitive onboard product.
Here’s what might make this privatization attempt a bit different than past ones, though. It was recently announced that in 2024, PIA turned its first annual profit in two decades. One can’t help but be a little skeptical of the math being used there, though if it’s true, that shows some significant improvement.
One thing that might make a PIA privatization much more practical is that the government has taken over nearly all of the company’s roughly $3 billion in debt, so that any potential bidder wouldn’t be on the hook for that.
What could a privatization of PIA look like?
Pakistan is a fairly large country (with over 230 million residents), and there’s quite a bit of demand for air travel to and from Pakistan. For one, there’s significant foreign investment in the country, and on top of that, Pakistan exports a huge number of workers to other countries.
At first glance, the most logical investment for PIA would be from one of the Gulf carriers, like Emirates Airline or Qatar Airways. After all, these airlines have significant service to Pakistan, and I’m sure it’s a market they’d like to dominate even more. I would imagine that taking over PIA would come with some favorable air rights as well.
In 2022, there were reports that Qatar Airways was interested in buying a stake in PIA. That would be a logical enough fit, and on top of that, Qatar Airways is known for investing in other airlines. That being said, usually Qatar Airways makes passive investments in airlines that can easily run themselves (like IAG, the parent company of British Airways), rather than taking on airlines like PIA, which need to be rebuilt from the ground up.
It’s also worth keeping in mind how big of a role PIA played in Emirates launching. Emirates started in the mid-1980s with the support of PIA, which provided the airline with technical and administrative expertise, and even provided the airline with its first aircraft. As a matter of fact, Emirates’ two letter airline code is “EK,” and that stands for “Emirates through Karachi,” reflecting that Emirates’ first flight was between Dubai and Karachi.
There’s definitely a lot of potential here for an investment. If a party were interested in trying to get involved with PIA, it would no doubt be an uphill battle. That being said, it might not be impossible? I mean, both Air India and ITA Airways have been privatized in recent years, and in the past, many of us assumed that could never happen.
It still seems that if you were wanting to run an airline in Pakistan, you’d be better off starting from scratch, with new planes, new labor contracts and expectations, etc.
Bottom line
Pakistan’s government is once again looking to privatize Pakistan International Airlines. We’ve seen this attempted several times before, though conditions are more favorable this time around. for one, the government is willing to take over most of PIA’s debt, which addresses a major concern of any potential buyer. PIA also claims to have turned its first profit in around two decades, suggesting the airline isn’t as much of a disaster as it used to be.
It’ll be very interesting to see if any airline group is interested, or if an investment would come from a non-airline firm.
What do you make of the concept of PIA being privatized?
