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ISLAMABAD: Senate Standing Committee on Privatization was informed that the Fauji Foundation is not part of the Arif Habib consortium set to acquire Pakistan International Airlines (PIA), while the government will retain a 25 percent stake in the national carrier valued at Rs45 billion.
The briefing was given during a committee meeting chaired by Senator Afnanullah Khan, where officials also revealed that necessary changes would be made to existing bilateral air service agreements with Gulf countries as part of the airline’s post-privatization restructuring.
During the meeting, Senator Afnanullah Khan called for either the privatization of Islamabad International Airport or immediate improvements in its facilities, adding that cleanliness conditions at Karachi Airport were poor. Senator Palwasha Khan criticized the government, questioning whether the state could no longer manage its own institutions and was instead handing everything over to the private sector.
The privatization secretary said companies from Saudi Arabia, Türkiye, and the United Arab Emirates have shown interest in operating Pakistani airports, while the Asian Development Bank is also willing to support airport outsourcing initiatives. He noted that outsourcing major airports could help improve facilities at smaller airports.
According to officials, the Arif Habib-led consortium — which has hired a US-based aviation consultancy firm — plans to invest Rs125 billion in PIA. The financial close is expected within three months, with an initial payment of Rs10 billion to the government. Authorities estimate the airline’s value will rise from Rs9 billion to Rs180 billion after financial restructuring. A business plan will be presented within a month, and the fleet is projected to expand to 40 aircraft within four years.
The privatization secretary reiterated that the Fauji Foundation has no role in the consortium and confirmed the government will retain a minority stake in the airline.
He further stated that shutting down PIA would have cost between Rs200 billion and Rs300 billion, as the government would have been required to settle all liabilities, including Rs34 billion in pension payments.
Responding to a question from the committee chair, the secretary said investor interest in airport privatization has increased following progress on the airline’s privatization. He added that long entry delays at Islamabad Airport highlight the need for management reforms.
Senator Bilal Ahmed suggested outsourcing all airports simultaneously, adding that the Civil Aviation Authority could provide technical input. Senator Umar Farooq raised objections to the privatization process of the national airline.
In response, the committee chair noted that PIA had been incurring annual losses of around Rs100 billion, and reducing this burden would be a major relief given the country’s Rs17 trillion national budget.
The privatization secretary assured the committee that no bidder had been given preferential treatment. A petition against the Arif Habib Group is pending before the Supreme Court, but he clarified that this does not automatically disqualify the group. Financial scrutiny of bidders was conducted through the Financial Management Unit, with reports also obtained from the World Bank, FBR, and other institutions.
