PIA privatization final draft prepared: 60% shares to be sold on Oct 1

September 24, 2024 (MLN): The final draft for Pakistan International Airlines' privatization has been prepared, with 60% of the carrier’s shares set for sale on October 01, a Privatization Commission official said.

The airline's assets are valued at Rs155 billion, while liabilities under PIA-CL amount to Rs200bn.

Instead of an upfront $500 million, the buyer is expected to invest over a three-year period, according to the Secretary of the Commission, with Rs70bn required annually to keep the struggling airline operational.

The carrier, which will be sold at a cumulative loss of Rs45bn, is not currently sustainable, the official revealed.

The bidding process will take place on October 01, with the share transfer to be completed within two months, as outlined during a briefing to the National Assembly’s Privatization Committee.

PIA, which employs 320 certified pilots, will need additional staff to support an expected increase in its fleet. The airline generates Rs1.5bn annually in Federal Excise Duty (FED) on ticket sales, a figure that is anticipated to double, according to the briefing.

The Secretary also disclosed that the buyer may consider layoffs after two to three years. However, the committee has recommended a five-year moratorium on layoffs and suggested salary increases for employees.

The buyer will shoulder Rs35bn in salary obligations, including severance for 7,000 employees, while the federal government will be responsible for pensions of retirees before privatization.

PIA’s name will not be changed, and no routes will be canceled without federal government approval, per conditions in the privatization draft.

The final draft with bidders will be finalized tomorrow, according to Commission officials.

Copyright Mettis Link News