Pakistan reports delaying bidding for national airline until September as bidders seek more information
ISLAMABAD: Pakistan’s government has postponed the final bidding for its national airline until the end of September as potential bidders seek more information to evaluate the carrier, international business magazine Bloomberg reported this week.
Islamabad plans to sell Pakistan International Airlines (PIA) and outsource three airports to curb losses and boost foreign exchange reserves as the country’s fragile $350 billion economy faces a balance of payments crisis.
Privatization of loss-making state-run enterprises has long been on the International Monetary Fund’s (IMF) list of recommendations for Pakistan, which signed a $7 billion loan deal with the IMF this month. The Pakistani government said in July it planned to announce a bid date within 10 days.
“Pakistan has delayed the final bidding process for state-run Pakistan International Airlines by two months to the end of September as potential bidders sought more information to evaluate the airline, according to people familiar with the matter,” Bloomberg reported on Monday.
Bidders are waiting for the airline’s latest audited financial statements, clarification on banned flights to Europe and aircraft leasing agreements, Bloomberg reported, citing anonymous sources familiar with the matter.
The European Union Aviation Safety Agency (EASA) banned PIA from flying to its most profitable routes in Europe and the UK following a PIA plane crash in Karachi in 2020 that killed nearly 100 people and a subsequent scandal over pilot licenses. The government reported in parliament that the ban will remain in place, reducing the airline’s annual revenue by nearly 40 billion rupees ($143.73 million).
Pakistan is considering selling between 51 percent and 100 percent of the airline, which has not reported an annual profit in nearly two decades. In June, it selected six companies to bid for the airline, including a consortium led by the Yunus Brothers Group, one of the country’s largest business conglomerates, and one led by businessman Arif Habib.
A popular airline during its heyday in the 1960s and 1970s, PIA has been plagued by financial losses, mismanagement and operational challenges in recent years, as well as high debts, inefficiencies, corruption allegations and an overall decline in its financial performance.
Successive Pakistani governments have avoided selling the national airline as it could be highly unpopular, but the country’s recent macroeconomic crisis and the urgent need to secure a new financial bailout package from the IMF have forced the government to press ahead with the auction.
