The federal government plans to complete the privatisation of Pakistan International Airlines by the end of this year after resolving Rs45 billion in liabilities with the approval of the International Monetary Fund. During a briefing to the Senate Standing Committee on Privatisation, Secretary of the Privatisation Commission Usman Akhtar Bajwa explained that these liabilities, mainly Rs26 to Rs27 billion in unpaid passenger tax dues to the Federal Board of Revenue, had discouraged potential investors in earlier bidding rounds. He stated that the IMF had now permitted the government to take responsibility for these dues and agreed to waive general sales tax on new aircraft purchases for the airline’s new buyer, enabling future fleet modernisation.
Bajwa informed the committee, chaired by Senator Dr Afnanullah Khan, that four domestic business groups have been shortlisted for the PIA transaction. The first consortium includes Lucky Cement, Hub Power Holdings, Kohat Cement, and Metro Ventures. The second group consists of Arif Habib Corporation, Fatima Fertilizer, City Schools, and Lake City Holdings, while Fauji Fertilizer Company and Air Blue Limited are participating individually. He added that all stakeholders are currently assessing PIA’s assets and liabilities, with the process expected to conclude by December 2025 once consensus on transaction terms is achieved.
Committee members expressed concern over the absence of interest from leading international airlines. Bajwa explained that regional carriers were hesitant to acquire a competing airline and benefited commercially from PIA’s weaker position in the market. He noted that PIA recently resumed its Manchester route and achieved full bookings for the next four months, reflecting growing operational stability.
Regarding the Roosevelt Hotel in New York, Bajwa said that the financial advisory firm JLL had completed its due diligence and recommended forming a joint venture structure offering multiple exit options for the government. Although the cabinet approved the proposal in July, JLL later withdrew due to a conflict of interest, prompting the government to appoint a new financial advisor to advance the process.
The committee was also briefed on the transfer of the Precision Engineering Complex to the Pakistan Air Force. The complex manufactures aircraft parts and defence equipment, employs 223 workers, and carries liabilities linked to 381 retired staff members. Officials reported that PEC generated Rs397 million in revenue this year against expenses exceeding Rs850 million. As per the cabinet’s May 1 decision, ownership of the complex, along with all assets and liabilities, will formally shift to the Pakistan Air Force.
The panel further reviewed progress on outsourcing landside services at Islamabad International Airport. Officials disclosed that a Turkish company initially submitted a bid but later withdrew over disagreements regarding revenue-sharing ratios. Negotiations are now ongoing for a government-to-government agreement with the United Arab Emirates to manage airport operations.
Senator Afnanullah recommended outsourcing the airport’s operations to a reputable international operator capable of ensuring efficient management and improved service delivery. He also praised the successful privatisation of First Women Bank Limited, recently acquired by the UAE-based International Holding Company, and directed authorities to promptly address the pension-related grievances of retired PIA employees.
