PIA handover to new owners planned by end-June after completion of formalities, says advisor

The government aims to hand over Pakistan International Airlines (PIA) to its new owners by the end of June after completing the remaining codal formalities and documentation, Prime Minister’s Adviser on Privatisation Muhammad Ali said in an interview with Business Recorder. 

Muhammad Ali said there was no hurdle in transferring the airline to the buyers, although several issues had to be settled between the bidding and closing stages of the transaction.

PIA was sold in December 2025 to a consortium led by Karachi-based Arif Habib Corporation, which acquired a 75% stake for Rs135 billion, or about $482 million, through a televised auction. Fauji Fertiliser Company later joined the investor group.

The transaction includes Rs 10 billion for government equity and Rs 125 billion in committed capital for debt reduction and fleet modernisation.

Muhammad Ali said PIA had global contracts, loans secured against aircraft and lease agreements that required no-objection certificates. Permissions from lenders were also needed to transfer these arrangements from PIA to the new entity.

He said several liabilities were to be shifted to PIA Holding Company, while issues related to the Federal Board of Revenue also had to be resolved.

The adviser said the PIA Act of 1956 had been repealed, except for a clause retaining the airline’s name. The law was first introduced through an ordinance because Parliament was not in session, and was later approved by Parliament.

He said management decisions during the transition period were being taken by PIA in consultation with the bidders.

On tax concessions, Muhammad Ali said the transaction structure agreed for all bidders provided that General Sales Tax would not apply to aircraft, spare parts and related items, as the tax could make operations unviable and hurt competitiveness.

He said IMF approval for the exemption had been obtained. Similar concessions could be extended to other airlines, but would require fresh approval from the IMF, he added.

Muhammad Ali said the Privatisation Commission supported extending such facilities to other airlines to ensure a level playing field.