In a bid to rescue Pakistan International Airlines (PIA) from its ongoing financial woes, caretaker Prime Minister Anwaar-ul-Haq Kakar has issued a directive to expedite the privatization process of the national flag carrier. This move comes in response to the severe challenges faced by PIA in recent weeks, including flight cancellations due to a fuel supply shortage.
Over the past few weeks, PIA’s flight operations have been severely impacted, with numerous cancellations across various cities, including Karachi, Lahore, Islamabad, Quetta, Bahawalpur, Multan, Gwadar, and others. The supply of fuel by the Pakistan State Oil (PSO) to PIA was notably reduced on Sunday, aggravating the airline’s financial difficulties.
During a high-level review meeting focused on PIA’s financial crisis, Prime Minister Kakar stressed the urgency of finalizing the privatization process within the stipulated time frame. He also called for regular compliance reports to be submitted to his office.
The Prime Minister assured that the government would continue to provide support to PIA until the privatization process is successfully completed. This move is in line with the government’s broader strategy to privatize state-owned enterprises (SOEs) facing financial losses in an effort to safeguard the national exchequer.
PIA’s financial situation has been a subject of concern for some time, prompting action by the government. In August 2023, the Cabinet Committee on Privatization (CCoP) approved the placement of PIA on an active list for privatization, following parliamentary approval of necessary amendments. The CCoP also granted assent to hire a financial advisor for the transaction involving PIA’s Roosevelt Hotel in New York.
In 2016, PIA underwent a significant transformation when it was converted from a corporation into a public limited company registered under the Companies Ordinance, 1984. This legislative process was initiated through the joint session of parliament, which passed the PIAC (Conversion) Act, 2016, resulting in the formation of Pakistan International Airlines Corporation Limited (PIACL). However, the Act included a critical amendment that restricted the federal government from transferring management control in the airline business of PIACL while retaining a minimum of 51% of shares in the entity.
The push for privatization is seen as a pivotal step towards reviving PIA’s financial health and ensuring its sustainability in the long run. The government remains committed to overseeing this transition and supporting the airline until its successful privatization.
