Pakistan’s recent attempt to sell its struggling national airline, Pakistan International Airlines (PIA), has highlighted the severe economic challenges facing the country. PIA, mired in debt, was pressured to sell as part of an agreement with the International Monetary Fund (IMF) for a $7 billion loan. The IMF required the government to privatize the loss-making airline to alleviate its fiscal burden. In response, the government led by Prime Minister Shahbaz Sharif sought potential buyers, ultimately pre-qualifying six groups for the sale. In June, Blue World City, a real estate firm, emerged as the final bidder.
However, the bid made by Blue World City was startlingly low, revealing the extent of Pakistan’s financial crisis. The government had set a minimum sale price of 85 billion Pakistani rupees (around Rs 250 crore) for a 60% stake in PIA. Yet, the bid offered by Blue World City was only 10 billion Pakistani rupees (approximately Rs 30 crore), just an eighth of the required price.
In a move to ensure transparency, the government broadcast the bidding process live on the state-run PTV channel, with the auction held in a hotel in Islamabad. Despite the public spectacle, the bid was rejected as it fell far short of the government’s expectations. Following the failed sale, Blue World City Chairman Saad Nazir expressed that if his bid was rejected, he wished the Pakistani government the best.
This failed attempt to sell the airline underscores PIA’s grim financial situation. Once a proud national carrier, the airline is now burdened with enormous debts and faces a lack of confidence from potential buyers. PIA’s total assets are valued at around 152 billion Pakistani rupees (roughly Rs 450 crore), which includes its fleet and operational routes. However, the airline also carries liabilities amounting to nearly 1 billion rupees. PIA’s struggles were compounded by mismanagement and scandals, including the European Union’s decision to ban its flights in 2020 due to the discovery of several pilots operating with fake licenses.
While foreign interest in PIA has been nonexistent, there is some local interest. The government of Punjab has expressed interest in acquiring the airline. Maryam Nawaz, Chief Minister of Punjab and daughter of former Prime Minister Nawaz Sharif, proposed taking over PIA and rebranding it as ‘Air Punjab’. This proposal is still under consideration and awaits a formal response from Pakistan’s parliament.
