Pakistan’s government has outlined that the new buyer of Pakistan International Airlines (PIA) must invest between Rs60 billion and Rs70 billion over a five-year period to revive the loss-making carrier.
Privatisation Commission Secretary Usman Bajwa shared this during a Senate Standing Committee on Privatisation meeting on July 22, 2025, chaired by Senator Dr Afnan Ullah Khan of PML-N. The investment will focus on financial recovery, operational improvements, and fleet expansion. Final requirements await audited financial accounts next month.
Advisor to the Prime Minister on Privatisation, Muhammad Ali, confirmed after the meeting that the total needs will be clarified once the June-end accounts are available. This estimate appears lower than the $300 million set in the last failed attempt, possibly due to expected profitability from reopened European and UK routes, as well as tax exemptions on aircraft leases.
Bajwa noted that PIA plans to operate Manchester flights from August 14, 2025, after the UK lifted its ban, imposed following bogus pilot degree claims under the previous PTI government. Security concerns persist for North American routes, but efforts continue to address them.
The investor retains 85% of the bid amount for airline reinvestment, with the government receiving only 15%. PIA’s fleet age has risen to 18.5 years, requiring doubling within five years. Early July 2025, PIA’s CEO reported operating 19 aircraft.
A Ministry of Finance report debunked PIA’s Rs26 billion profit claim for last year, revealing a net loss of Rs4.6 billion. The “accounting profit” stemmed from treating past losses as future assets, not operational gains.
Read: PIA Privatization Enters Final Phase with 85% Stake Sale Planned Within 90 Days
The government seeks a stake sale of 51% to 100% with management control. Last year’s attempt yielded a bid of Rs10 billion against a minimum of Rs85.03 billion.
Officials will begin due diligence for pre-qualified companies soon, with site visits and expert sessions on aircraft and routes scheduled to start next week. They emphasised that PIA operates on an unsustainable model; the government previously provided annual subsidies of Rs100 billion.
The committee reviewed complaints from PIA pensioners, uncovering liabilities of Rs14.9 billion across 6,625 employees. Chairman Khan raised concerns about the inadequate pension amounts, stating, “The pension amount is extremely low—how are people expected to survive?” The Ministry of Privatisation confirmed it aligns annual revisions with allowances and requested grade-wise details for the next meeting.
PMDC remains off the privatisation list for now, prompting senators to question the Petroleum Ministry’s mandate. ZTBL, included in the first phase of the August 2024 list, has postponed hiring a financial advisor due to high fee demands (nearly Rs 500 million) and will restart the process after a six-month delay.
Key Investment Requirements for PIA Buyer
| Aspect | Details |
|---|---|
| Investment Amount | Rs60-70 billion over 5 years |
| Purpose | Financial recovery, operations, fleet expansion |
| Fleet Expansion | Double from 19 aircraft |
| Bid Retention | Investor keeps 85% for reinvestment |
| Government Share | 15% of bid amount |
Data source: Privatisation Commission and Senate Committee.
PIA’s privatisation demands substantial investment for revival. As audited accounts near, stakeholders anticipate clarity on needs and bidder commitments.
