The government has grasped the nettle firmly enough, but will anyone else? Obliged by the IMF, the federal government is again trying to privatize PIA. less than a year after it failed to do so last year. The reason it could not be sold is because none of the bidders would come up to the reserve price. Is there any reason why they should do so now? Actually, there is, because the national carrier actually turned a profit in 2024, which was its first since 2003. Indeed, that might create a case for dropping the privatization, but there is no guarantee that this will continue, but it does indicate that the current management has done enough of the heavy lifting for a change to we occurred, and it might mean that the new owners will not have to do much more than continue the present direction.
Is this sale attempt going to be any different? Unless a new buyer comes to the fore, the expressions of interest, which have been invited for next week, will probably come from the same groups as put in a bid last time. However, this time they will be smelling blood, because they would know that the government has to sell. It had promised the IMF a sale by the end of this financial year, which is not happening. It only got a deferral to the end of this year. The reserved price last time was $300 million. Though PIA has made no major aircraft acquisitions since, it has undergone a corporate restructuring that shifted almost all of PIA’s legacy devote to the government’s books. There was an offer by KP CM Ali Amin Gandapur to meet the reserved price, but as the offer came after the auction, it was not taken up. Renewing the offer would involve prequalifying, and submitting an expression of interest. There would also the question of how the province would pay about Rs 90 billion, and that too in the dollars the Pakistan government expects.
PIA has certainly fallen on hard times. It has not only changed from a profit centre for the government go a losing state enterprise, but now it cannot even be sold. Now that it has turned a profit, there may be a case for its not being privatized, but that begs the question of whether the state should be in the aviation business at all.
