In a strategic move, the federal cabinet sanctioned the restructuring of Pakistan International Airlines (PIA) into two distinct entities: TopCo and HoldCo. This decision comes just days before the 2024 general elections. The restructuring aims to enhance investor attraction towards PIA, as conveyed by the Caretaker Minister for Privatisation, Fawad Hasan Fawad. TopCo will manage core operations such as engineering, ground handling, flight kitchen, and training, whereas HoldCo will oversee the Precision Engineering Complex, PIA Investment Limited, and related departments and assets.
This reorganization aligns with recommendations from a financial adviser hired for the national flag carrier’s financial restructuring. The cabinet, led by Caretaker Prime Minister Anwaar-ul-Haq Kakar, also emphasized the importance of resolving outstanding government dues to expedite the process.
Read: ECP Halts Privatisation of PIA Ahead of Elections
Challenges and Strategic Decisions
The backdrop of this restructuring includes a commitment by the then-Pakistan Democratic Movement (PDM)-led government to privatize the airline as part of an IMF bailout fiscal discipline plan. PIA’s potential alarming losses, projected to reach Rs259 billion by 2030 without significant reforms, underscore the urgency of these measures. Moreover, the European Union’s Aviation Safety Agency’s suspension of PIA’s authorization to fly to the bloc since 2020 further complicates the airline’s operational challenges.
Broader Cabinet Decisions
In addition to PIA’s restructuring, the federal cabinet approved several key economic and health sector decisions. Notably, it sanctioned the privatization of the First Woman Bank and halted wheat imports due to ample national reserves, a move expected to conserve foreign exchange. This decision follows the Economic Coordination Committee’s (ECC) February 1 resolution to ban wheat imports amidst stable flour prices and a forecasted bumper wheat crop.
The cabinet also deregulated prices for non-essential medicines, aiming to amend the Drug Policy 2018 for enhanced healthcare outcomes. It specified that the Pakistan Medical and Dental Council should ensure doctors refrain from prescribing unnecessary vitamins and supplements, with the Drug Regulatory Authority of Pakistan (DRAP) tasked with creating a relevant list.
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