PIA’s final auction delayed for two months as bidders ask for more information: report 

The Government of Pakistan has delayed the final auction for state-owned Pakistan International Airlines (PIA) by two months until the end of September after potential bidders sought more information to assess the carrier, Bloomberg reported. 

The bidders are waiting for the airline’s latest audited accounts, clarity on flights to Europe that are banned and aircraft lease agreements. 

The government is set to privatise PIA and outsource operations at three major airports in a bid to reduce financial losses and boost foreign exchange reserves. This decision comes as Pakistan’s $350 billion economy struggles with a balance of payment crisis.

The move to privatize PIA, a loss-making state-owned enterprise, aligns with the International Monetary Fund’s (IMF) recommendations. Pakistan, which recently secured a $7 billion loan from the IMF, announced plans to set an auction date for the airline within the next ten days.

However, the final auction for PIA has been postponed until the end of September, as potential buyers have requested more information to thoroughly evaluate the airline, including its most recent audited financial statements and details on existing restrictions, such as the ongoing ban on flights to Europe. According to Bloomberg, bidders are also seeking clarity on aircraft lease agreements.

The European Union Aviation Safety Agency (EASA) had previously banned PIA from operating in Europe and Britain following a fatal plane crash in Karachi in 2020, which resulted in nearly 100 deaths and was further exacerbated by a pilot licensing scandal. This ban has significantly impacted the airline’s revenue, costing it approximately 40 billion rupees annually, as reported to the parliament.

The government is considering selling between 51 percent and 100 percent of PIA, which has not reported a profit in almost two decades. Six bidders have been shortlisted for the upcoming auction, including prominent local business conglomerates and individual businessmen.

Once a celebrated carrier in the 1960s and 1970s, PIA has since faced numerous challenges, including financial losses, mismanagement, and allegations of corruption, which have significantly diminished its performance. With the country’s economic conditions pressing, the current administration has prioritized the airline’s privatization as part of its broader strategy to comply with IMF directives and stabilize the national economy.