The Arif Habib Corporation Limited–led consortium has acquired a majority stake in Pakistan International Airlines (PIA), submitting the highest bid of Rs135 billion in the historic privatisation of the national flag carrier.
The auction saw intense competition as the Lucky Cement Limited–led consortium raised its bid from Rs101.5 billion to Rs134 billion in the second round, prompting Arif Habib to secure its winning bid at Rs135 billion. Private airline Air Blue (Private) Ltd also participated, though its offer remained far below the top bids.
Finance Minister Muhammad Aurangzeb hailed the process, noting that the successful privatisation would ultimately benefit Pakistan. He highlighted that all bidders were domestic, calling it a “major and encouraging development” for the country’s investment climate. “The best and biggest business groups are competing for the national airline, and the airline will be led by large, seasoned Pakistani investors,” Aurangzeb said. He added that this process would indirectly attract foreign investment by boosting investor confidence and demonstrating Pakistan’s commitment to transparent economic reforms.
Privatisation Commission Adviser Muhammad Ali emphasised that the government’s aim is not merely to sell PIA but to restore it to financial stability and operational excellence. He confirmed that the government had decided to sell a 75% stake, with 92.5% of the proceeds earmarked for improving the airline and the remaining 7.5% going to the state. Payments will be made in phases, with two-thirds due upfront and the balance within 12 months. Ali also allowed winning bidders to include up to two additional parties after the auction.
The first round of the open-bidding ceremony, held in Islamabad, included three contenders: the Arif Habib consortium, the Lucky Cement consortium, and Air Blue (Private) Ltd. Fauji Fertiliser Company Ltd, previously considered a strong contender, formally withdrew from the process last week.
The auction, Pakistan’s second televised attempt to privatise PIA after last year’s failed bid, was conducted in a transparent public ceremony. Representatives of each bidding group deposited sealed offers into a transparent box during a live broadcast. The process continues with a second round, allowing the lower-priced bidder a chance to match or exceed the top bid.
Prime Minister Shehbaz Sharif praised the Privatisation Commission for ensuring a transparent process and encouraged cabinet members to observe the proceedings. Officials stressed that 92.5% of the bid amount will be reinvested into PIA, with the remaining 25% stake retained by the government for potential future sale.
The winning consortium is now tasked with revitalising PIA, which operates flights to 78 destinations and holds approximately 170 landing slots worldwide. The government has guaranteed 12 months of job security for employees, while pensions, medical benefits, and other post-retirement perks will be managed by the holding company.
Analysts note that PIA’s prospects have improved significantly since last year. The government assumed most of the airline’s legacy debt, the carrier posted its first pre-tax profit in two decades, and Britain and the European Union lifted a five-year ban, reopening lucrative international routes.
The airline’s privatisation forms part of Pakistan’s broader economic reform strategy under the IMF bailout, alongside the planned divestment of stakes in state-owned banks, power companies, and other loss-making enterprises. Officials say fresh investment and professional management are essential to restoring PIA as a profitable, internationally competitive airline.
