Last Updated:November 15, 2024, 19:05 IST

The government set a minimum sale price of 85 billion Pakistani rupees (approximately Rs 250 crore) for a 60% stake in PIA.

Pakistan’s recent attempt to sell its financially troubled national airline, Pakistan International Airlines (PIA) has revealed just how dire Pakistan’s economic situation has become. PIA, which is drowning in debt, was placed under pressure to sell as part of an agreement with the International Monetary Fund (IMF) for a loan of $7 billion. The IMF insisted that the government privatise its loss-making airline in order to reduce its fiscal burden. In response, the Prime Minister Shahbaz Sharif-led government began seeking potential buyers, eventually pre-qualifying six groups for the sale. In June, real estate firm Blue World City emerged as the final bidder.

However, the bid that was eventually placed was so shockingly low that it underscored just how deep Pakistan’s financial troubles have become. The government had set a minimum sale price of 85 billion Pakistani rupees (approximately Rs 250 crore) for a 60% stake in PIA. Yet, when the bid was made, Blue World City offered a mere 10 billion Pakistani rupees (about Rs 30 crore), a figure that was just an eighth of the government’s asking price.

In an attempt to bring transparency to the bidding process, the Pakistani government broadcast the event live. The auction was held in a hotel in Islamabad, with the proceedings aired on the state-run PTV channel for the entire nation to witness. Despite the fanfare, the bid was ultimately rejected, with the government deeming the offer far too low. Following the collapse of the sale, Blue World City Chairman Saad Nazir commented that if his bid was rejected, he wished the Pakistan government the best.

This failed sale attempt shines a harsh spotlight on the dire financial state of PIA, a once-proud national carrier now burdened by staggering debts and a lack of confidence from potential buyers. The airline’s total assets are valued at around 152 billion Pakistani rupees (roughly Rs 450 crore), including its fleet of aircraft and operational routes. Yet, despite this, PIA continues to have liabilities including debts approaching 1 billion rupees. The airline has also been plagued by mismanagement and scandal, most notably the European Union’s decision to ban its flights in 2020 after several pilots were found to be operating with fake licences.

While foreign buyers have steered clear of PIA, there is some local interest. The government of the Punjab province in Pakistan expressed its interest in purchasing the airline. Maryam Nawaz, the Chief Minister of Punjab Province and daughter of former Prime Minister Nawaz Sharif, proposed taking over PIA and rebranding it as ‘Air Punjab’. This proposal is still under consideration, but it has not yet received a formal response from Pakistan’s parliament.