Pakistan International Airlines (PIA) owes Pakistan State Oil Company Limited (PSO) Rs28.88 billion for jet fuel supplies, including Rs14.29 billion in principal and Rs14.59 billion in late payment surcharges, as of February 28, 2025, Energy Minister Ali Pervaiz Malik informed the National Assembly.
In a written response, the minister said PIA’s financial and liquidity issues were preventing it from clearing its dues, adding that PSO was actively pursuing the airline for payment.
The government has long sought to privatize the national flag carrier, but PIA’s weak financial condition, substantial liabilities, and operational challenges have slowed the process.
Currently, PIA’s liabilities stand at Rs45 billion, including Rs26 billion in unpaid taxes to the Federal Board of Revenue (FBR), Rs10 billion owed to the Civil Aviation Authority (CAA), and additional pension liabilities.
To facilitate privatisation, the government is formulating a strategy to address these financial burdens and make the airline more attractive to potential buyers.
The government has assured the International Monetary Fund (IMF) that PIA’s privatisation will be completed by July 2025. Authorities have informed the IMF that an Expression of Interest (EOI) for PIA’s privatisation will be issued by the end of March 2025.
The government is currently assessing investor sentiment, following an earlier failed privatisation attempt in which a real estate developer was the sole bidder, offering Rs10 billion—far below the minimum Rs85 billion valuation.
To encourage investor interest, the IMF has agreed to relax key conditions, including waiving the 18% sales tax on aircraft leases and adjusting PIA’s Rs45 billion liabilities.
