Privatisation Hurdles: PIA Faces Uncertain Future

The privatisation process of Pakistan International Airlines (PIA) is facing challenges as potential bidders demand substantial guarantees from the government. These include workforce management flexibility, pension relaxations, operational tax waivers, and reinstated international flight permissions. The process aims to tackle PIA’s Rs 834 billion debt, accumulated due to political interference and corruption.

The privatisation process for debt-ridden Pakistan International Airlines (PIA) is encountering significant obstacles as interested bidders insist on multiple government guarantees before participating in the October 1 bidding.

PIA, which is 86% government-owned, faces a total liability of at least Rs 834 billion. Years of financial losses and debts have propelled the privatisation commission towards complete privatisation. The corporation was once profitable but fell victim to political meddling and corruption.

Interested companies demand the removal of the three-year workforce retention condition and pension relaxations. International and domestic flights face frequent cancellations due to fuel shortages, spare part issues, and organisational problems. Bidders, including two Pakistani private airlines, also request government assurances for resuming UK and Europe flights, suspended since a 2020 crash revealed safety lapses. Defence Minister Khawaja Asif announced plans to finalise the privatisation by October's end, though senior officials see challenges in meeting this deadline due to the extensive demands from potential buyers.

(With inputs from agencies.)