CCoP fast-tracks PIAA privatization, approves 51-100% stake sale

March 25, 2025 (MLN): The Pakistan Cabinet Committee on Privatization (CCoP) approved a fast-tracked plan to sell a 51-100% stake in Pakistan International Airlines Corp (PSX: PIAA), including management control, in its second attempt to offload the struggling carrier.

Deputy Prime Minister Ishaq Dar, while chairing the meeting of the Cabinet Committee, underscored the government’s commitment to pushing ahead with the divestment, aiming to unlock the national carrier’s full potential and ease its strain on public finances.

The decision comes as Pakistan accelerates broader economic reforms under an IMF-backed agenda, according to the press release issued today.

It is to be noted that PIAA has long been a financial drag on the treasury, with mounting liabilities and operational inefficiencies.

The plan is expected to attract both local and foreign investors, with officials signaling a preference for strategic buyers capable of revamping the airline’s operations.

Notably, in the previous failed attempt, most of the six shortlisted parties were unwilling to partner with the government, as they had concerns over the complete ownership, sale tax of the acquiring aircraft, and negative equity of Rs45 billion on the airliners' balance sheet.

Earlier, in the first attempt, the government had offered up to 60% stakes.

Now, under the second attempt, the government has allowed to off-load up to 100% shares, while also taking approval from the IMF for the removal of GST and absorbing Rs45bn negative equities to present the airliners with a clean balance sheet.

Notably, European routes which were closed for years, have now been opened—an incentive.

The first attempt to privatize PIA collapsed, where a real estate developer as the sole bidder, offering just Rs10bn against the Rs85bn asking price.

Despite the failure, the government paid Ernst & Young Rs1.2bn in advisory fees, drawing criticism from former privatization minister Abdul Aleem Khan.

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