Finalizing the Deal
The Arif Habib Group consortium has announced its decision to purchase the Pakistani government’s remaining 25% stake in Pakistan International Airlines (PIA). This move will grant the private consortium complete ownership and operational control of the national carrier.
Shahid Ali Habib, CEO of Arif Habib Limited, confirmed to BBC Urdu that the consortium has decided to acquire the residual shares. The formal decision is expected in April, with payment to be completed within the following twelve months.
“After acquiring 100% of PIA’s shares, it will operate entirely as a private entity,” Shahid Ali Habib stated. “The airline’s complete control will be with the private sector, and it will be free from government-nominated board members.”
Background of the Privatization
This concludes a privatization process that began last December when the Arif Habib consortium secured a 75% stake in PIA for PKR 135 billion. The government’s goal was to revitalize the loss-making airline through restructuring, fleet expansion, and service improvements.
Following that sale, the government granted the consortium a 90-day option to purchase the remaining 25% stake, valued at approximately PKR 45 billion, with a final deadline set for the end of April. A January agreement allowed for a 12-month payment period for this transaction.
The successful consortium comprises Fatima Fertilizer (34.1%), Fauji Fertilizer Company (33.9%), Lucky Cement (16%), and the AKD Group with The City School (16%).
Turnaround Plans for PIA
Shahid Ali outlined the consortium’s improvement plan, which focuses on enhancing staff services, ticketing, safety, and security. The strategy also includes increasing flight frequency on profitable routes.
The December 2024 bidding process was competitive. The Arif Habib consortium’s final bid of PKR 135 billion surpassed an initial PKR 115 billion offer from the same group and a PKR 101.5 billion bid from the rival Lucky Cement consortium. The government had set a minimum price of PKR 100 billion.
Financial Restructuring and Government Benefits
The airline’s journey to privatization has involved significant financial restructuring. For years, PIA was a major burden on the national exchequer. However, in April 2025, the government claimed PIA had posted its first profit in 21 years.
Experts note this turnaround was largely enabled by the government absorbing over PKR 600 billion of PIA’s debt and liabilities, effectively cleaning its balance sheet to make it attractive for sale.
While the government will receive only about 7.5% of the proceeds from the 75% stake sale—with the remainder reinvested into PIA—the primary benefit is escaping annual billion-rupee losses. “The government will no longer face the annual financial deficit it incurred from running PIA,” said privatization expert Shahbaz Jamil.
Impact on Employees and Assets
Regarding PIA’s future, the consortium inherits an airline with 38 aircraft (only 18 operational) and landing rights at 78 airports worldwide. Current employees, numbering around 6,500, will have job protection for one year, after which voluntary separation schemes may be offered.
Retired employees’ pensions, medical bills, and concessional tickets will be managed by the PIA Holding Company. Valuable non-core assets, such as the Roosevelt and Scribe hotels in New York and Paris, are excluded from the transaction, which includes only core operational assets related to cargo, passengers, kitchen, and training.
A New Era for the National Carrier
The full acquisition marks the end of a protracted privatization effort and the beginning of a new, fully private chapter for PIA. The government aims to transfer the perennial financial burden to the private sector, which now faces the challenge of implementing its promised turnaround and restoring the airline’s former stature.
