The Pakistani government has delayed the final auction for its national airline until the end of September as potential bidders seek more information to assess the carrier.
Islamabad plans to sell the Pakistan International Airlines (PIA) and outsource three of its airports in an effort to curtail losses and enhance its foreign exchange reserves amid the country’s fragile $350 billion economy facing a balance of payment crisis.
The privatization of the loss-making state-owned enterprise has long been recommended by the International Monetary Fund (IMF), with which Pakistan signed a $7 billion loan agreement this month. In July, the government announced it expected to set the auction date within 10 days.
“Pakistan has delayed the final auction for state-owned Pakistan International Airlines by two months until the end of September after potential bidders sought more information to assess the carrier,” Bloomberg reported on Monday.
Quoting anonymous sources familiar with the matter, Bloomberg said bidders are waiting for the airline’s latest audited accounts, clarity on flights to Europe that are banned, and aircraft lease agreements.
The European Union Aviation Safety Agency (EASA) banned PIA from its most lucrative routes in Europe and Britain after a PIA plane crash in Karachi in 2020 killed nearly 100 people, followed by a scandal over pilot licenses. The ban continues, costing the airline an annual revenue of nearly 40 billion rupees ($143.73 million), the government has told parliament.
Pakistan is looking to sell 51 percent to 100 percent of the carrier, which has failed to report an annual profit for nearly two decades. In June, Pakistan selected six bidders to bid for the airline, including a consortium led by the Yunus Brothers Group, one of the nation’s largest business conglomerates, and another by businessman Arif Habib.
A popular airline during its heydays in the ‘60s and ‘70s, PIA has struggled with financial losses, mismanagement, and operational challenges in recent years. It has also been burdened by high debt, inefficiencies, and corruption allegations, resulting in an overall decline in its financial performance.
Previous Pakistani governments avoided disposing of the flag carrier, considering it a potentially highly unpopular move. However, Pakistan’s recent macroeconomic crisis and its desperate need to secure another financial assistance package from the IMF have forced the government to proceed with the auction.
