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The process will not only help provide people quality service, but would also improve the overall image of Pakistan International Airlines locally and internationally, said an official press release Thursday. – File photo
The process will not only help provide people quality service, but would also improve the overall image of Pakistan International Airlines locally and internationally, said an official press release Thursday. – File photo
Prime Minister Nawaz Sharif presides over a meeting on PIA at the Prime Minister's Office on Thursday. — Photo by APP
Prime Minister Nawaz Sharif presides over a meeting on PIA at the Prime Minister's Office on Thursday. — Photo by APP

ISLAMABAD: The government has decided to privatise the Pakistan International Airlines, beginning with 26 per cent shares.

Presiding over a meeting on the PIA at the Prime Minister’s Office on Thursday, Prime Minister Nawaz Sharif directed the ministry of privatisation and civil aviation division to initiate the process of privatisation of the national flag carrier.

He also ordered the authorities concerned to ensure transparency and adherence of all relevant ‘codal’ formalities and guidelines of superior courts in the process.

A government official told Dawn that the prime minister gave a shrug when it was pointed out that the decision would be opposed at various levels and the PML-N would be criticised for selling out the national airline.

Mr Sharif told the meeting that the government was not in a position to bear a monthly loss of Rs3.3 billion and argued that the only way to redeem the old glory of the national airline was to involve the private sector in its affairs.

The PPP has announced that it would oppose any government move to privatise the PIA and Pakistan Steel.

Leader of Opposition in the National Assembly Syed Khurshid Shah told his party’s workers on Wednesday that any attempt to put the jobs of thousands of people at the mercy of the private sector would be resisted.

The Pakistan Tehreek-i-Insaf said it would not support PIA’s privatisation but it wanted revival of the airline through a comprehensive plan.

It said the PML-N government had announced that it would appoint professionals in state enterprises, but surprisingly now it was planning to sell them off.

But the PM’s Office said in a statement that the decision to privatise PIA would not only help provide quality service to people but also improve the overall image of the national flag carrier locally and internationally.

The prime minister allowed privatisation of 26 per cent shares of the PIA in an open and transparent manner to make it competitive and service-oriented.

A source told Dawn that PIA’s management would be transferred to the buyers.

The prime minister said the government was fully committed to reforming and restructuring all ailing state enterprises.

He directed the PIA management to focus on operational efficiency, cut down wasteful expenses and promote qualified professionals to compete in the modern day environment of air transport industry.

Earlier reviewing the performance of the airline, the prime minister expressed deep concern over mismanagement in its affairs and said he was saddened to observe that the airline had not come up to people’s expectations.

He was briefed on the problems and issues afflicting PIA, such as its ever declining service standard, lack of reliability and punctuality, pilferages, poor quality of manpower, training and job rotation, ageing fleet, overstaffing and high loans at exorbitant financial cost.

He directed the PIA management to cut down losses in the short term to make the airline a viable entity for privatisation.

Mr Sharif also directed that all policy decisions to revitalise the public sector organisation would be made by its board of governors.

He ordered full transparency in the decision-making process to protect public interest.

Finance Minister Ishaq Dar, Information Minister Parvez Rashid, Petroleum Minister Shahid Khaqan Abbasi and senior officials attended the meeting.

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Comments (69) Closed

Sonal Sep 12, 2013 09:36pm

Nawaz is on adrenalin!! Good for Pakistan!

Pervez Sep 12, 2013 09:44pm

So that why Pia was run into the ground. Open and transparent......who is NS kidding? Watch the share price fly after the auction.

Riaz Sep 12, 2013 09:47pm

This was going to happen ... 26pc is just a start ... at the end 0.26pc would be left with Government of Pakistan, and rest with companies owned by Relatives and Friends of Mr. Shariff. Pakistan Steel Mill would be next in for privatization ... mark my words!

Junaid siddiqui Sep 12, 2013 10:18pm

What a about Saleem seyani ex managing director. Bring him back to justice. It's time for Pakistan to excecute first prosecute later.

Mir Sep 12, 2013 10:26pm

Dear PM, this will not work,it is just white wash. Please shut this airline. Start a new airline with no liabilities . Hire employes on the basis of ability no to political appointment. Medical facilities on the system of insurance. I know it is very difficult but this is the only solution .

shami Sep 12, 2013 10:47pm

PIA, Pakistan Railways, Pakistan steel mills, and other Power producing companies must be privatised to reform Pakistan economy which is dying fast. Nawaz has shown lots of courage to privatise at least one quarter of PIA. I hope that he takes more aggressive steps in this direction.

Asif Gulyani Sep 12, 2013 10:57pm

Very Sad .

Asif Gulyani Sep 12, 2013 10:58pm

really condemnable act of Sharief Government.

Raja Islam Sep 12, 2013 11:11pm

If the PM is serious, he will have to sell the majority shares and hand over management to the new ownership. Staff and Labour unions will have to be banned and government and political interference will have to be eliminated.

rhmeghani Sep 12, 2013 11:16pm

Hopefully business class seats would be available for sale

Sadiq Sep 12, 2013 11:30pm

First step to make PIA efficient is to fire all political appointees. Nawaz will not like that. So here we go, someone from PML is going to make money. This does not mean PPP was any better.

Naseema Perveen Sep 12, 2013 11:28pm

thats a good attempt, it will work good Inshala!

Ahsan Sep 12, 2013 11:40pm

I hope it is not repeat story of MCB when he took charge last time...

AJ Sep 12, 2013 11:48pm

It is a plan which will lead to disaster. If you go by the corrupt practices of Pakistan, the invester will draw back his 26 pc investment through corruption and then will have the management in his own hands to inflict further losses before leaving it for the government to take over the ruins of the organisation. Would they inform, which of the turkish company is in the plans.

Imran A. Sep 12, 2013 11:51pm

Good move... keep up the good work Nawaz Shareef!

Saleem Sep 12, 2013 11:59pm

Who is Naawz Sharif to sell State Assets like that? PIA and other state organizations are not his family business. Is there no rule of law in Pakistan?

farhan Sep 13, 2013 12:08am

what about the stratospheric salaries of the PIA officials?

Parvez Sep 13, 2013 12:08am

Good decission............well done Mr. Nawaz Sharif

Syed Ahmed Sep 13, 2013 12:15am

What will be the term and conditions? Isn't the experience of business train, enough? I fear the private party will enjoy the benefits and the government will suffer the losses.

Anonymus Sep 13, 2013 12:56am

Limit or halt Private Airline operations for some periods and give PIA ample time to recover from current crisis

I. Ahmed Sep 13, 2013 03:02am

Finally, a decision from the PM desk! What previous President

faisal Sep 13, 2013 03:35am

If PIA was privitaized 5 years before it could have been in much better position. Nevertheless a good step by Nawaz Govt. Hope this time he donot gain political advantages. PSM and Railways should also be handed over to some foreign company coz ministers cannot correct them.

Asif Sep 13, 2013 05:13am

Congratulations Mian Mansha Sa'ab. You efforts before and during the elections paid off,

Syed Mohammad Husain Sep 13, 2013 05:29am

Reference: Aviation Week & Space Technology July 1, 2013 Airline Rankings: Revenues $250 million -- 2 Billion, PIA is ranked at #23 (12 months ending Sept 12, 2012), with revenues $1,374 millions. The other groupings of airlines is for revenues greater than 6 billion, and revenues 2- 6 billion. PIA should be given a fresh start with close monitoring. The management should come from the airline.

Fahad Sep 13, 2013 06:15am

Grand !!

Shah Sep 13, 2013 06:13am

Mohtaram Syed Khurshid Shah Sb. before acting like you care, if your Govt. was not too busy looting, PIA would not become a fish market and brought down to its shameful lows, so spare us the Freud and let the Govt. clean up the garbage that your party left behind. Regards, Shah

raju Sep 13, 2013 06:17am

they should change the name first.. what nonsense is this P.I.A?

Ramesh Manghirmalani Sep 13, 2013 07:09am

PPP is run by wild animals like Mr Zardari, these land lords want to run socialist economy

AM Sep 13, 2013 07:22am

PPP will oppose it until Zardari gets a 20% share.

mujahid Sep 13, 2013 07:38am

The Prime-Minister MNS called upon Defense Minister who luckily has the same name like Nawaz Sharif to discuss the fate of PIA who informed the PM that it is better if we look at the international affairs with regard to the opinion of the foreign ministry so the foreign minister was called upon yet another Nawaz Sharif as to make sure that USA or other countries dont get offended.Finally all the three PM,FM,DM decided that since they do not have good relations with Malik Riaz Hussain (MRH) we better call Mian Mansha (MM) dont think about another MM who was Marvi Memon whereabouts not known now to take PIA into its hands.

Shabbir Kazmi Sep 13, 2013 08:52am

It is a move initiated by groups having vested interest, who wish to take management control by acquiring 26% shares of PIA. These groups have made attempts in the past to create 'private airlines' but failed miserably. If they could not manage 'smaller operations' how could they manage mega size PIA. They are eying one thing only 'real estate owned by the national carrier, which they could use for 'other purposes'. A big question, who will pay the subsidy being paid of certain routes, which are loss making but must?

Saqib Sharif Sep 13, 2013 09:30am

Syed Khursheed Shah is more concerned about the political appointees then to improve PIA performance and image of Pakistan.

Asif Ahmed Khan Sep 13, 2013 09:34am

my support with the PM. hope services and returns improve.

Shehzad Zafar Sep 13, 2013 09:49am

Please dont sell it your cronies. They will pay back all the money you have just recently given to them in terms of circular debt. Make good rights for PIA so that every international Pakistani passenger is forced to come through PIA and it will not be in debt.

Mansoor Khan Sep 13, 2013 09:50am

I can not believe the leadership of PPP ,Mr. Khurshid Shah of PPP opposing the privatization of PIA. The PPP first run the national institutions to ground and than oppose any effort to revitalize these institutions. To me this kind of careless attitude is close to betrayal of the duty as a parliamentarian of Pakistan.
Mansoor Khan

YOUSUF HUSSAIN Sep 13, 2013 10:43am

Privatisation is not the solution,there are many factors involved in PIA loss,first you assume that when PIA was in profit at that time there was only one Air line that is PIA,Now at present more than five air lines are operating in the country,and how they are making profit we need research to under stand the reseaons why the PIA is in loss,privatisation will not give the anwser of the loss,and the system will continue on that basis with out any result that will again show you incompetency in sovling the problems.

Rajab ali Sep 13, 2013 10:52am

it wanted revival of the airline through a comprehensive plan

usman Sep 13, 2013 11:26am

Excellent decision, once one of the best airlines is now an ailing fleet. I am hopeful that privatizing it would lead to tremendous benefit. We have hundreds of thousands of airline passengers traveling local and international air journeys each year, privatization will help attract customers and uplift the name of the national flag carrier and the example of PTCL is infront of us.

Aziz Sep 13, 2013 11:35am

The PPP is wrong to oppose privatisation. In third world countries state enterprises mean added incentives for those in political power to interfere in the profitable running of the organisation. We do not want state funds to subsidise cronies of political parties in power in such enterprises. Both PIA and the Steel Mill have been pushed in to financial abyss by political cronyism.

amjad Sep 13, 2013 11:35am

At last thank GOD some one is using some brain. PIA should be privatised by Govt 49% & Private 51% ratio. so that the corrupt govts like PPP could not dump the jayalas in these institutions

cameo Sep 13, 2013 11:57am

Go for it No pain no gain.

iqbal Sep 13, 2013 12:20pm

Only way to get the airline sustainable the over staffing and appiontment of professional can put the air line on path to profitability

Syed Hassan Sep 13, 2013 12:30pm

It was in the air for last couple of months, that PIA is going to be privatized and perhaps sold to Emirates Airlines. One news was that Mr. Mansha has been put on PIA's BoD for this specific purpose.

I support privatization of PIA as the national flag carrier is down the drain when it comes to quality service. Now you can't even get a polite smile let alone a proper service onboard from our esteemed air stewardesses.

PPP's concern that private sector will take people out from their jobs in PIA is baseless. It is these people who are sitting pretty on their positions, drawings perks and hefty salaries, all at the expense of the tax payer and doing absolutely nothing. This is so common that you really do not have to make an effort to find such people in the airline they are spilling all over the place.

Privatization is supported provided it is conducted in a transparent manner.

Itseconomystupid Sep 13, 2013 12:46pm

Good decision by current govt, its the only way to revamp the crippling airline.

Farhan Jaffar Sep 13, 2013 01:41pm

In my opinion this is good step towards improving the health of PIA. We've witnessed significant improvement in PTCL after its management control pass on to Etisalat in terms of quality and economic outcome. Private sector does bring innovation, productivity and cost saving measures while at the same time improving the quality of service.

One thing Im skeptic about is the question of who keeps the management control and who gets the bidding. If management control is transferred to the private sector through 26% shareholding, it'll serve the purpose of both keeping significant profit sharing by the nation while at the same time reaping the benefits of privatization. However, if the management control stays with the Govt, then i dont think much of benefit will accrue to the dwindling state of PIA's health.

In PTCL example we've witnessed 49% share and management control transfer to Etisalat; in my view it is important that the bidding be based not just on the offer price but also keeping competence of the new management in view (selling off to some other International Airline like Thai etc may serve the purpose).

One should be wary of who is getting the final bid and if the process is transparent, ethical and does not involve personal gain to compromise the integrity of the reform. Should involve competent audit firms in the process for due diligence for the purposes.

As for the loss of jobs of the employees; we should understand that under current circumstances there is no room for nepotism or favors for political gains (which i believe has been the case for mass recruitment both in Railways and PIA). Today organizations and countries are competing through innovation, productivity, competence and technological edge. In order to sustain, we should take steps in cutting down costs where not needed. Providing same or better quality with lesser costs is in itself an evidence of inefficient management in retrospect (as evident in the PTCL case).

PTI can play a vital role in keeping close monitoring of the process and ensuring that the purpose of reform is not defeated.

Khatry Sep 13, 2013 02:13pm

Do privatise, but do not sell our assets to foreign investors. We do not want repeat of PTCL, KESC, UBL and others. This is nothing but neo-slavery. Subservient masses drudging to enrich a few, and then feeling benevolence towards them.

Sell PIA shares to Pakistanis only. Dual nationality Pakistanis should also be excluded from ownership.

Also, make a condition that no one (person, persons or entity) can own more than say a ten thousandth of the subscription offered. This way no single entity or entities will become dominant in the affairs of PIA.

Amin Sep 13, 2013 02:18pm

Shahid Khaqan Abbasi having interest in airblue, how come he be part of these discussion... Totally biased panel... God bless PIA

Khanm Sep 13, 2013 04:52pm

Are we blind. Look around any government run business turns into dust. Steel mills is facing the same crises. Our government does not have Midas touch. What ever they touch turns in to dust. Government should govern not to indulge in business.

Khanm Sep 13, 2013 04:53pm

Are we blind. Look around any government run business turns into dust. Steel mills is facing the same crises. Our government does not have Midas touch. What ever they touch turns in to dust. Government should govern not to indulge in business.

Naeem Syed Sep 13, 2013 05:16pm

PM Shaib please make sure that none of your financial and political backers are in the bidding for any part of state privatization process. No Mansha, No Hamza, No Riaz Malik. Please!!!! Open the sale Internationally( Altaf Hussain Excluded). Not only will it bring Talent as well as badly needed foreign exchange. Reduce the non essential staff, do away with the unions, and half your problems are already solved.

Schazad Sep 13, 2013 05:23pm

PM Mian Nawaz Sharif is selling PIA to his friend in Dubai for pennies. This is according to Ex DM PIA. No respect for rules and regulation. No conflict of interest.

AJ Sep 13, 2013 06:08pm

Is privatization the answer to all the ills that our state institutions and assets? If he answer is yes! than perhaps the governance of the country be privatized as well. The same very asset were once the pride of the nation and internationally acclaimed were run by some very honest ,committed and visionaries like (late) Nur Khan. All you need are professionals with impeccable character capable of withstanding nepotism and political pressures and not subservient to any interest group. Finding such people is akin to looking for a needle in a haystack; specially when any and all stakeholders are not sincere to the greater good.

Nadeem (US) Sep 13, 2013 06:20pm

Just a suggestion - PIA should stop serving food during domestic flight. Here in US not a single airline provide food during domestic flight; they are saving chunk of money. They only provide a samll pack of peanut and a cold drink. If a pessanger is hungry he/she can buy anything available to eat. For International route PIA should provide food. God bless Pakistan, PIA, Steel Mill, Railways, Wapda, KESC.........ect. Aameen.

Nadeem (US) Sep 13, 2013 06:26pm

Khurshid Shah is worried about the job of his party's unskilled, illetrate workers who were inducted in PIA.

Nadeem (US) Sep 13, 2013 06:35pm

@raju: It's same as PR (Pakistan Railways) KESC (Karachi Electric Supply Corproation), PSM (Pakistan Steel Mills), Wapda (Water and Power Development Authority).........ect. So what's wrong with PIA (Pakistan International Airline).

Nadeem (US) Sep 13, 2013 06:39pm

I think PIA should bring back her old lucky Pak flag tail logo. I love PIA, my father was a founder member of PIA, he gave his 35 years to this organization with honesty, without any political affilication. God bless PIA.

Nadeem (US) Sep 13, 2013 08:10pm

We were the one who helped Dubai based Emirates airline; not it's time to Emirates to pay back to PIA by acquring 25% or more PIA shares or help PIA by saleing their services to PIA. God bless PIA.

M H Kayani Sep 13, 2013 09:10pm

Who wants share in sinking SHIP.

Mahmood Minhas Sep 13, 2013 09:22pm

The step of the government is appreciated to over come the loosing national units.

S A Khokhar Sep 13, 2013 09:39pm

Shahid Khaqan Abbasi and senior officials attended the meeting"..... wow a owner of another airline Airblue is deciding to sell PIA! what a country dude there is no conflict of interest at all!

kam Sep 13, 2013 10:18pm

@Khatry: Go and learn economics and business management.

conspirashidurrehman Sep 14, 2013 01:53am

Are you guys serious, appreciating PM sellling National assets? These are the same people who appreciated selling of

conspirashidurrehman Sep 14, 2013 01:54am

these are the same people who appreciated selling rivers to India.

M Khan Sep 14, 2013 09:26am

@Asif: I d onot care if Mr. Mansha takes over the bankrupt airlines as long as the process is transparent and fair to all parties involved especially to people of Pakistan who are the main steak holder in this airline, there should be open bidding process who ever is willing to pay the highest price should get the designated share in the airline. I see a negative campaign against this proposal from the vested interest. Mansoor Khan USA

Helal Enver Sep 14, 2013 02:11pm

Good move indeed but this Privatization process should come with Management Control.. failing to do this will make no difference as its the Management which needs complete overhaul.. Good Governance with on the spot right decision making is the 'KEY' which will turn around this airline..

Abu Mahad Sep 14, 2013 11:53pm

The only solution for PIA woes is to appoint higher management purely on merit, cut the jobs of unnecessary and non-qualified people from the organization and improve the services. PIA is bloating with so many appointments made during the previous years. All these thousands of people need to be sacked. The organization should be smart with few people and clean services. If this step is not done, PIA will never ever become a decent airline.

Armagan Akram Sep 15, 2013 02:23pm

A good step in the right direction, the PPP stand however is absurd. They are suggesting that PIA should be run for the benefit of the employees rather than the customers! Which airline around the world is run for the benefit of the employees?

Pakistan cannot be immune to the changes around the world regarding these types of industries. British Airways was privatised 30 years ago! why has it taken so long for Pakistan to catch up? The unions have selfishly stalled this for years, and in the process stalled development of the nation in the process.

Hayat Sep 15, 2013 04:13pm

An Excellent Step in the right direction ....and altough I am a PTI supporter I must say....Qadam Barhao Nawaz sharif hum tumhare saath hain.......

Safeer Butt Sep 15, 2013 06:53pm

Grt step by PM.