• Khawaja Asif calls it ‘first biggest transaction of privatisation process’, 25pc shares retained by govt
• Privatisation aide says liabilities worth Rs180bn transferred to new buyers, Centre will not do business in aviation sector
• Opposition alliance rejects deal

ISLAMABAD: As the PIA privatisation received criticism from different quarters, the federal government on Wednesday defended the transaction that paved the way for a successful bid of Rs135 billion, saying it retained a 25pc share in the national airline, which translates into Rs45 billion.

On Tuesday, the Arif Habib-led consortium won the auction for a controlling stake in the PIA after a competitive bidding process, including two other entities. Under this deal, about Rs10 billion will go to the national exchequer while the rest of the money will be funnelled into the PIA for its revival.

Against this backdrop, the government on Wednesday appeared to be defending the deal as the best possible option.

Aviation Minister Khawaja Asif said the government was content with the transaction and termed it symbolic. According to the aviation minister, “…This is the first biggest transaction of our privatisation process. This transaction has a great symbolic value.”

He said the government still retained 25pc of PIA’s shares and 92.5 of the amount from the sale being invested back into the airline was actually an investment in a national asset. “We did not give a handout to anyone,” he asserted, adding that the country had borne losses for 50-55 years following nationalisation of businesses.

“We have to construct such transactions [as that of PIA’s sale] to rid [the national exchequer] of these losses. We don’t have a choice. We are beggars, not the choosers,” Mr Asif said, adding that several other transactions were to be carried out in the future.

Meanwhile, Adviser to the Prime Minister on Privatisation Muhammad Ali, while addressing a post-PIA privatisation press conference in Islamabad, also dispelled the impression that the PIA was sold off without financial liabilities.

He said the government was transferring liabilities worth Rs180 billion to the new buyer, adding that the long-term debt of Rs650 billion was not passed on as no one would be interested in the deal due to such a debt that carried an annual interest of 15pc.

The winning bid was of Rs135 billion for 75pc shares, of which 92.5pc would go to the airline, he said, adding, “If we had not ensured this, PIA would never be revived.”

Besides Rs10 billion, the government has the equity of Rs45 billion in the form of its 25pc share. If 75pc shares have the value of Rs135 billion,

then the value of all shares is Rs180 billion, he said, adding that if the private buyer wanted to acquire these shares, they would have to pay Rs45 billion to the government. He also clarified that non-core assets, including the two major hotels, were not part of the deal. Only the PIA aviation, engineering, training, handling, cargo, and flight kitchen were part of the deal.

‘Tremendous opportunity’

Mr Ali said the private sector had a tremendous opportunity to take the PIA to new heights. “We have delivered to them a positive balance sheet having equity of Rs9 billion, and the greatest needs are investment, acquisition of new aircraft and efficient management for the airline that has a vast market, demand and landing rights and air service agreements with 97 countries.”

The main purpose behind the privatisation is that the private sector is the best-suited to run these businesses, he said, adding that the federal government would not engage in any sort of business in the aviation sector. However, there are no restrictions on provinces launching an airline.

In the past, the government could not run the national flag-carrier and faced a loss of Rs40 to Rs50 billion annually, he said, adding that between 2015 and 2024, the PIA suffered a loss of Rs500 billion.

Despite all odds, PIA has the capacity to grow to become a full-service carrier since it does not have long-term debt and investment can be increased beyond the commitment made by the bidder.

‘Regional airline’

He said the PIA had been reduced to a regional airline, serving mostly the Middle East. Out of the 33 aircraft, 24 were inducted in the fleet before 2010, and these were about 25 years old. Seven aircraft were almost 15 years old, while only two aircraft were from 2017.

Out of the 18 operational aircraft, 12 are leased while only six aircraft are owned by the PIA. He said the PIA had only 30pc of the domestic market share against 80pc in the past.

Meanwhile, the Privatisation Commission board recommended that the bid offer submitted by Arif Habib Consortium be sent to the Cabinet Committee on Priva­tisation for consideration and approval.

Separately, the Sta­nding Committee on Defence, in its meeting on Wednesday, acknowledged the defence ministry’s efforts for a transparent bidding process.

Opposition rejects deal

The Tehreek Tahafuz Ayeen-i-Pakistan, a PTI-led opposition alliance, rejected the privatisation process, warning that any attempt to dispose of the national asset without public mandate, parliamentary oversight, transparency, and constitutional legitimacy would be unacceptable and void in moral and political terms.

It issued a warning to all local and international private parties, investors, lenders, and intermediaries that “any entity choosing to conduct business or enter into agreements with this illegal government does so entirely at its own risk”.

Published in Dawn, December 25th, 2025