Pakistan is facing economic crisis
Pakistan’s oldest government airline PIA is going to be sold once again. Pakistan, which has been facing economic crisis for the last several years, has decided to sell this loss-making airline under pressure from the IMF. Last year no buyer was found, but hopes have been raised again in the new bidding to be held on December 23. The most interesting thing is that this time the Military Foundation is also involved in the race.
Airline will go private due to IMF pressure
Pakistan is currently almost in a bankrupt situation and the 7 billion dollar package it received from the IMF has set a clear condition that it should either reform or sell the loss-making government companies. PIA has been struggling with billions of rupees of debt and ever-increasing losses for years. This airline, started in 1946, was once a respected name at the international level, but now it has become Pakistan’s biggest economic problem.
Big role of military among the bidders
Four bidders are involved in the new auction, out of which the most talked about is the participation of Fauji Foundation. This organization runs under the indirect influence of Pakistan Army. Although Army Chief General Asim Munir himself is not on the board, the officers selected by him have a deep influence on the foundation’s decisions. If Fauji Foundation buys PIA, it will be the first time that Pakistan Army will formally enter the aviation sector.
Why did the last auction fail?
In 2024, the government tried to sell the airline, but only one offer came and that too many times less than the base price fixed by the government. A major reason for the dissatisfaction of the buyers was that the Pakistan government was not ready to give up 100% control. After this, the government itself transferred about 80% of the loan of PIA to its own accounts, so that the company could be made buyable.
Airline condition: Plane seized, flights reduced
In the last few years, the condition of PIA became so bad that many of its planes were seized at foreign airports due to non-payment of dues. Despite having a 34-plane fleet, the airline commands only 23% of Pakistan’s domestic market. In contrast, Middle East airlines attract more than 60% of Pakistan’s total international traffic.
Europe flights resume
After the terrible plane crash in Karachi in 2020, the European Union and Britain had banned PIA due to security reasons. The investigation also revealed that the licenses of many Pakistani pilots were doubtful. Four years later, in 2024, the European Union lifted the ban and now PIA is preparing to start flights to London and Manchester.
Will PIA be sold this time?
Now the question is whether Pakistan will be successful in selling its oldest airline this time? Due to the economic crisis, interest of the army and pressure from the IMF, the auction of December 23 is considered very important. If the deal is done, it will be Pakistan’s biggest privatization deal after almost 20 years.