PIA Sale Scheduled for July, Govt Assures IMF

[PIA330]

Regarding PIA’s privatization, the Privatisation Ministry updated the IMF on its status, establishing July 2025 as the deadline to sell the loss-making airline.

The report added that officials informed the IMF they are currently assessing market sentiment before issuing an Expression of Interest to attract investors by the end of this month.

The government appears uncertain about the second attempt’s prospects, as it has resumed the process of gauging investor interest and determining whether there’s appetite for purchasing a financially troubled entity.

Officials told the IMF that three parties might participate in the bidding, including two bidders who previously withdrew when the government refused to waive the 18% sales tax on aircraft leases and remove Rs. 45 billion in liabilities from PIA’s balance sheet before privatization.

The IMF has now agreed to relax these two conditions, which, along with reopening European routes, are viewed as key incentives for a successful second round of bidding.

[HassanKhan]

I don't see why investors would be interested in buying debt ridden PIA for such a large sum of money. 85 billion pkr for 60%. (that means they value the company at 141.6 billion pkr)

The carrier, as mentioned, is a loss making machine and would require a lot of restructuring and cost cutting to make it profitable. Expansion will also be a problem as the investors will immediately face the problem of an aging fleet on top of a very bad reputation amongst the public which I think will take a very large amount of energy to turn around.
On top of the big investment they are making to get a hold of (majority of) the company.
They also need to invest another large amount of money as per the condition set by the government (I have found mixed reports on the exact sum if anyone knows feel free to educate me) which would further reduces the incentives of acquiring the carrier.

The point I am trying to make is that many billions of Pakistani rupees would have to be splurged by the private party for the deal to go through for a high risk and low margin asset. If they want to run an airline they are better off starting their own, case in point AirSial: they started with only 3.5 billion rupees just 4pc of what would cost to aquire PIA and it would be safe to assume that they would have healthier finances than PIA. With the investment that the party is going to bring in, they could have a much larger market entry than AirSial did, directly competing with PIA, competing for the Long Haul High Expat regions which PIA has seemingly conquered amongst the Pakistani airlines, and beyond.

[Amaad Lone]

Too Little too late.

PIA running nonstop losses since 2004.
Brand PIA has lost its charm.
777 fleet is old and needs replacement.
A320 fleet is leased
Market share is less than 20%
high taxes on aircraft, fuel and spares make it impossible to make money
Pakistani work ethics.

The only reason someone will buy PIA is because they see the potential for an international flag carrier of a country with 250 million people.

40 years of politicians have destroyed what was once good airline

[PIA330]

Too Little too late.

PIA running nonstop losses since 2004.
Brand PIA has lost its charm.
777 fleet is old and needs replacement.
A320 fleet is leased
Market share is less than 20%
high taxes on aircraft, fuel and spares make it impossible to make money
Pakistani work ethics.

The only reason someone will buy PIA is because they see the potential for an international flag carrier of a country with 250 million people.

40 years of politicians have destroyed what was once good airline

PIA is our Flag Carrier, our Flag carrier should be revived no matter what. They are companies from Karachi and Lahore, especially with the YB Holdings still in the bid is now scaring UAE and Qatar due to the revival of European routes and soon UK Routes. I am hopeful PIA will be revived and Privatized in a better way.

Your right the 777 fleet is so old that there needs to be new fabric and new seats, PIA needs a A330-900 and A321XLR.

[PIA330]

I don't see why investors would be interested in buying debt ridden PIA for such a large sum of money. 85 billion pkr for 60%. (that means they value the company at 141.6 billion pkr)

The carrier, as mentioned, is a loss making machine and would require a lot of restructuring and cost cutting to make it profitable. Expansion will also be a problem as the investors will immediately face the problem of an aging fleet on top of a very bad reputation amongst the public which I think will take a very large amount of energy to turn around.
On top of the big investment they are making to get a hold of (majority of) the company.
They also need to invest another large amount of money as per the condition set by the government (I have found mixed reports on the exact sum if anyone knows feel free to educate me) which would further reduces the incentives of acquiring the carrier.

The point I am trying to make is that many billions of Pakistani rupees would have to be splurged by the private party for the deal to go through for a high risk and low margin asset. If they want to run an airline they are better off starting their own, case in point AirSial: they started with only 3.5 billion rupees just 4pc of what would cost to aquire PIA and it would be safe to assume that they would have healthier finances than PIA. With the investment that the party is going to bring in, they could have a much larger market entry than AirSial did, directly competing with PIA, competing for the Long Haul High Expat regions which PIA has seemingly conquered amongst the Pakistani airlines, and beyond.

Government will require them add about 15 new planes, and the Current and New bidders requested 18% GST exempted. So it should be much easy to get new planes.

[HassanKhan]

I don't see why investors would be interested in buying debt ridden PIA for such a large sum of money. 85 billion pkr for 60%. (that means they value the company at 141.6 billion pkr)

The carrier, as mentioned, is a loss making machine and would require a lot of restructuring and cost cutting to make it profitable. Expansion will also be a problem as the investors will immediately face the problem of an aging fleet on top of a very bad reputation amongst the public which I think will take a very large amount of energy to turn around.
On top of the big investment they are making to get a hold of (majority of) the company.
They also need to invest another large amount of money as per the condition set by the government (I have found mixed reports on the exact sum if anyone knows feel free to educate me) which would further reduces the incentives of acquiring the carrier.

The point I am trying to make is that many billions of Pakistani rupees would have to be splurged by the private party for the deal to go through for a high risk and low margin asset. If they want to run an airline they are better off starting their own, case in point AirSial: they started with only 3.5 billion rupees just 4pc of what would cost to aquire PIA and it would be safe to assume that they would have healthier finances than PIA. With the investment that the party is going to bring in, they could have a much larger market entry than AirSial did, directly competing with PIA, competing for the Long Haul High Expat regions which PIA has seemingly conquered amongst the Pakistani airlines, and beyond.

Government will require them add about 15 new planes, and the Current and New bidders requested 18% GST exempted. So it should be much easy to get new planes.

That is not my point, my point is that when you have such a large amount of money to invest in an airline why would the investor feel incentivised to buy into a failing airline instead of starting their own?

[PIA330]

I don't see why investors would be interested in buying debt ridden PIA for such a large sum of money. 85 billion pkr for 60%. (that means they value the company at 141.6 billion pkr)

The carrier, as mentioned, is a loss making machine and would require a lot of restructuring and cost cutting to make it profitable. Expansion will also be a problem as the investors will immediately face the problem of an aging fleet on top of a very bad reputation amongst the public which I think will take a very large amount of energy to turn around.
On top of the big investment they are making to get a hold of (majority of) the company.
They also need to invest another large amount of money as per the condition set by the government (I have found mixed reports on the exact sum if anyone knows feel free to educate me) which would further reduces the incentives of acquiring the carrier.

The point I am trying to make is that many billions of Pakistani rupees would have to be splurged by the private party for the deal to go through for a high risk and low margin asset. If they want to run an airline they are better off starting their own, case in point AirSial: they started with only 3.5 billion rupees just 4pc of what would cost to aquire PIA and it would be safe to assume that they would have healthier finances than PIA. With the investment that the party is going to bring in, they could have a much larger market entry than AirSial did, directly competing with PIA, competing for the Long Haul High Expat regions which PIA has seemingly conquered amongst the Pakistani airlines, and beyond.

Government will require them add about 15 new planes, and the Current and New bidders requested 18% GST exempted. So it should be much easy to get new planes.

That is not my point, my point is that when you have such a large amount of money to invest in an airline why would the investor feel incentivised to buy into a failing airline instead of starting their own?

That's a great point, well we have Arif Habib as an example he was participating in the Bidding process, then he backed out after Government did not listen to their needs. Now Arif Habib is a shareholder of a Karachi based airline called Air Karachi with other Karachi based businessmen.

Remember when Saad Nazir (Blue World City Owner) was asked if he wants to higher up his bid for PIA's bidding, he said he will start his own Airline. Saad Nazir is going to start a new Airline. We got other Pakistani Airline startups that are seeking license from CAA, like Q Airways, GoGreen Airways, and Jet Green Airlines.

Anyone investor who wants to buy PIA, probably wants to revive PIA and make changes. They know it could be a risk, they maybe see potential in making PIA like emirates or qatar.

This Privatization process for PIA, will even want the same investors to even run the Islamabad Airport, Karachi and Lahore airport too. Not only expertise in Aviation but managing Airports too.

[TomcatTask]

The Govt has low confidence in it's sale according to reports, they are continuing to 'monitor' market sentiment. The most realistic outcome of any of this is that one of the existing airlines simply just absorb PIA and take up its branding just like how it has happened in the case of US Airways imo. I honestly think selling it to Air Blue or Air Sial for a heavily discounted price to be the most feasible option.
Note, Blue World City was never a serious bidder, most of their talk has just been that, talk.

[PIA330]

They should follow the ITA example, it use to be Alitalia but due to bankruptcy and loss making. They shut down Alitalia and made ITA.

The Pak Ethanol consortium included Serene Air and AirSial too, Air Asia and Swiss Aviation. Pak Ethanol Consortium is still participating in PIA Privatization. Even if Pak Ethanol wins the bid, maybe PIA’s new management could have people from AirSial and Serene Air.

[PIA330]

The Govt has low confidence in it's sale according to reports, they are continuing to 'monitor' market sentiment. The most realistic outcome of any of this is that one of the existing airlines simply just absorb PIA and take up its branding just like how it has happened in the case of US Airways imo. I honestly think selling it to Air Blue or Air Sial for a heavily discounted price to be the most feasible option.
Note, Blue World City was never a serious bidder, most of their talk has just been that, talk.

They should follow the ITA example, it use to be Alitalia but due to bankruptcy and loss making. They shut down Alitalia and made ITA.

The Pak Ethanol consortium included Serene Air and AirSial too, Air Asia and Swiss Aviation. Pak Ethanol Consortium is still participating in PIA Privatization. Even if Pak Ethanol wins the bid, maybe PIA’s new management could have people from AirSial and Serene Air.