Lot of discussion is going on the sale of PIA one time pride of nation and best airline of the world. It suffered continuous loss due to incompetent management and political interference .The blame has to be shared by the successive governments who failed miserably to keep proper checks on its performance and kept employing people and pumping billions of rupees each year as a subsidy. To understand fall of PIA from grace to this poor condition and what went wrong with PIA, a brief history is needed. The most important and immediate requirement was to arrange 5 new aircrafts for long distance, and take back our lucrative routes sold out to foreign airlines and impose restrictions on foreign airlines by restricting their flights from Pakistan. PIA would have been back on its track and could also revive its past glory but we kept chasing shadows in the dark.
Nawaz Sharif in his manifesto of 2013 had promised to make PIA as model airline but later on decided to privatize it. It was one of the best airline of the world and we witnessed over 40 airlines touching ground of our Karachi Airport. How is it that we have forgotten”Hostellerie De France “located opposite Star Gate that used to provide catering facilities to these airlines but now abandoned. PIA with slogan”Great people to fly with” still popular throughout the world but political interference damaged airline as a result the condition kept nose diving. Let us throw some light how PIA has been destroyed. The down fall of PIA started from 1990 while introducing open sky policy and that virtually destroyed the national carrier. Again while introducing new Aviation policy in 2015 PIA was further damaged because national interest was completely overlooked and personal interest was given priority. While introducing aviation policy no stake holders were consulted as a result the policy collapsed. Ignoring stake holders was greatest blunder. However, new aviation policy was introduced by PTI government in the year 2019, the good thing was all stake holders were consulted. The PIA landed in greater trouble in the wake of its flight PK-8303 crashing in Karachi on May 20,2020, and the subsequent announcement by the Aviation Minister grounding 262 pilots on suspicion of not clearing their mandatory examinations. What is a Fake license? Any license issued other than CAA falls under the category of fake license. Right from ab initio the selection, training and the procedures are so fool proof that no one can get fake license from Civil Aviation Authority (CAA), in any case all these 262 PIA pilots were cleared as none of them was found with fake license, but the damage done to PIA and country was collosal. This resulted in ban on national flying carrier to European countries since June 2020 thus damaging PIA beyond repair now partially lifted.
There is no doubt that pursuit of the agenda of privatization, deregulation and liberalization shall reduce to some extent direct and indirect powers of patronage enjoyed by the state and get rid of subsidies but there is no wisdom in throwing away our strategic assets cheaply. For readers interest they must know that 70% traffic was of gulf countries when Emirates, Etihad, and Qatar airlines were not there and 30% revenue was from international routes. We had Air Buses A-300 that would take care of Middle East. Our all flights going to Nairobi would go full and pick up passenger from Dubai. PIA down fall started after introducing open sky policy. It was good step but blunder was made by not protecting interest of our national carrier. About 5000 to 6000 employees were laid off by PML N government being surplus inducted by PPP government. When PPP government came they reinstated all the employees thrown out by PML N. They were paid their salaries for the entire period and after getting their dues they resigned. These are the factors, beside other corrupt practices that was reason of downfall of PIA. The root cause was not the surplus manpower as propagated but the shortages of planes and selling of lucrative routes was major reason.
PIA has been sold to an Arif Habib led consortium on 23 December, 2025 after they won a competitive bid of Rs 135 billion. But our renowned economist Dr Shahid Hassan is of the view that Government’s claim that bidding price of 75 % shares of PIA of Rs 135 billion is wrong. It is only Rs 10 billion. Possible future investment cannot be included in sale price. Real worth of PIA is Landing rights at 170 countries & agreements with 97 countries. Any new Airline will not be able to secure these rights even by investing few hundred billion Rupees in next 50 years. He further said that it is wrong to say that sale of PIA is part of Economic reforms Agenda as targets of URRAN Pakistan have been drastically reduced. Declared objectives of Privatisation of PIA not likely to be achieved. There are three distinct concepts that they’re intentionally combining to confuse people.
a. Equity Purchase Price this is the money paid to the seller (here, the Government of Pakistan) in exchange for ownership by paying Rs 10 billion which is the actual sale price.
b. Capital Injection / Investment Commitment. This is money the buyer promises to inject into the company after acquisition to pay down debt, buy aircraft and fund operations in this deal it is Rs 125 billion but no time frame is given. This money does not go to the government. It goes into PIA itself, which the buyer now owns.
c. Total Transaction Headline Value says sale brought Rs 135 billion it is headline figure not sale price. Sale prices are not quoted in that manner. “The buyer will acquire 51% of the airline for Rs 10bn, and has committed to invest Rs 125bn in capital expenditures over X years. Announcing PIA sold for Rs 135 billion is wrong and deceptive. Can an acquiring company’s investment in its own subsidiary ever be counted as sale price? NEVER. Once the buyer owns the company, money invested belongs to the buyer. It raises enterprise value, not seller proceeds. It does not compensate the seller for past losses or assets. As reported PIA’s total liabilities amounted were to the tune of Rs 843 billion, of which Rs 600 billion have been transferred to holding company. Who will clear the liability the holding company a million dollar question? Government should inform the people how many SOE’s are left to be sold or outsourced. In fact there was no need to privatize PIA we just needed about 5 planes and take back our lucrative routes and within 6 months we could enter in to profit. It is very strange that government has not issued any clarification on the sale of PIA that it was sold in Rs 135 billion instead Rs 10 billion as claimed by our leading economists. In the absence of a clear and documented explanation, the government’s insistence on projecting the PIA transaction as a Rs135 billion sale raises serious questions of transparency and credibility. The actual sale consideration reportedly stands at around Rs10 billion, while the remaining Rs125 billion represents future investment commitments by the buyer an amount that, by no accepted financial or legal standard, can be conflated with the sale price. By failing to respond to well-founded criticism and by presenting investment obligations as immediate proceeds, the government appears to be indulging in gross misrepresentation. It is imperative that the authorities clarify the exact terms of the deal, distinguish between sale value and post-acquisition investment, and place all relevant documents in the public domain to restore trust and accountability.
