Pakistan’s long-running effort to privatise its national airline reached a decisive milestone on Tuesday as the Arif Habib–led consortium emerged as the highest bidder, securing a 75% stake in Pakistan International Airlines (PIA) with an offer of Rs135 billion. The competitive auction marked the country’s most significant privatisation transaction in nearly two decades and signaled renewed momentum in Pakistan’s economic reform agenda.
Intense Bidding Seals PIA Privatisation
The auction unfolded through multiple rounds of open bidding after participants crossed the government’s Rs100 billion reference price. The Lucky Cement–led consortium mounted a strong challenge, raising its final offer to Rs134 billion, just short of the winning bid.
Arif Habib Corporation initially entered the process with a lower offer but steadily increased its bid as the contest intensified. The session concluded after a brief recess, with Arif Habib securing the majority stake once bidding resumed at a base price of Rs125 billion.
Private airline Airblue exited earlier, submitting an offer of Rs26.5 billion, while Fauji Fertiliser Company had withdrawn from the process last week.
Who’s in the Winning Consortium
The successful consortium is anchored by Arif Habib Corporation Limited, alongside Fatima Fertiliser Company Limited, City Schools, and Lake City Holdings. The rival Lucky Cement group included Hub Power Holdings, Kohat Cement Company, and Metro Ventures.
Government officials confirmed that 92.5% of the sale proceeds will be injected directly into PIA to support operational recovery and fleet improvement. The remaining 7.5%—about Rs10.12 billion—will go to the federal exchequer. The state will retain a 25% stake, which the new owners may acquire later under the privatisation framework.
Government, Business Leaders Hail Outcome
Finance Minister Muhammad Aurangzeb described the all-Pakistani bidding lineup as a positive signal for the country’s investment climate, stressing that transparent reforms can indirectly attract foreign capital.
Prime Minister Shehbaz Sharif welcomed the transaction, calling it fulfillment of the government’s commitment to reduce the burden of loss-making state enterprises and stabilise the economy.
Arif Habib Group chief termed the deal a “triumph for Pakistan,” pledging to restore PIA’s standing through professional management and fresh investment.
Why PIA’s Valuation Improved
The sale comes after a failed attempt last year, when a single low bid derailed the process. Since then, the government has absorbed much of PIA’s legacy debt, the airline has posted its first pre-tax profit in 20 years, and the UK and EU have lifted a five-year ban, reopening lucrative international routes.
PIA currently operates rights to 78 destinations and holds around 170 global landing slots, assets officials say can unlock significant value with proper management.
The privatisation is part of a broader push under Pakistan’s IMF-backed reform programme, which also targets state-owned banks and power utilities as Islamabad seeks to curb fiscal losses and rebuild investor confidence.
