• New management pumps Rs80bn into PIA, pays Rs10bn to govt
• 40 conditions met before formal handover to new owners
• PM terms handover ‘milestone in economic reforms’
• Restructured PIACL board to be headed by Fauji Fertiliser chairman
ISLAMABAD: The government on Monday formally transferred management control of Pakistan International Airlines Corporation Limited (PIACL) to the Arif Habib Corporation-led consortium, marking the completion of the airline’s privatisation, which began last year.
Prime Minister Shehbaz Sharif, hailing the handover as “another milestone in Pakistan’s economic reform journey”, said it would lay “the foundation for [PIA’s] revival while reinforcing investor confidence in Pakistan”.
The handover follows the fulfilment of all conditions under the Share Purchase and Subscription Agreement (SPSA) signed on Jan 29, the Privatisation Commission announced after a meeting of the restructured PIACL board.
The board will now be chaired by retired Lt-Gen Anwar Ali Hyder, chairman of the Fauji Fertiliser Company, which holds 33.9pc of its shares.
The transaction required the completion of 40 conditions covering regulatory approvals, commercial contracts, taxation, corporate restructuring, governance and financing arrangements before management control could be transferred.
On the regulatory front, approvals were secured from domestic authorities, including the Pakistan Civil Aviation Authority, Competition Commission of Pakistan and Pakistan Telecommunication Authority, as well as aviation and merger control regulators in overseas jurisdictions where PIA operates, including Saudi Arabia and Kuwait.
These approvals were necessary to ensure that PIACL could continue to operate under the required regulatory permissions after the first closing.
A major part of the process involved obtaining 22 commercial consents from partners, aircraft lessors, maintenance and technical service providers, fuel suppliers, payment service providers and other operational counterparties.
The government also completed a series of corporate and legal measures, including shareholder approvals by PIA Holding Company Limited (PIAHCL) and PIACL, changes to the airline’s Articles of Association, an increase in authorised share capital and the issuance of new shares. Employee protection measures were incorporated through an extension of the Essential Services notification to ensure continuity of operations during the transition.
The Pakistan Aviation Authority’s existing rental arrangements for PAA-owned properties used by the airline have been extended for three years. Mechanisms for settling the authority’s legacy liabilities and bridge financing obligations have also been implemented.
To address legacy tax issues, the government introduced a structured repayment mechanism for outstanding liabilities, protected PIACL from coercive recovery actions related to past tax disputes and incorporated agreed HS Codes into the Sales Tax Act.
The government also amended the National Aviation Policy to address airfare regulation, wet leasing, negative equity provisions and aircraft retirement age while preserving key fiscal and operational incentives for the airline after privatisation.
According to the Privatisation Commission, all conditions were completed within a compressed timeframe while maintaining uninterrupted flight operations, preserving commercial relationships and protecting employees’ interests.
The winning consortium, selected through a competitive bidding process on Dec 23, 2025, committed to invest Rs180 billion. The package includes Rs55bn payable to the government for the acquisition and Rs125bn in fresh equity for the airline’s revival.
Investment
With the first financial closing completed, the consortium on Monday paid Rs10bn to the government and injected Rs80bn into PIACL. The fresh capital is intended to strengthen the airline’s balance sheet, finance fleet expansion and modernisation, expand its route network and improve operational performance and customer service.
The second financial closing is scheduled within 12 months, when the consortium is due to inject another Rs45bn into the airline. It has also indicated its intention to exercise an option to acquire the remaining 25pc stake in PIACL for an additional Rs45bn.
The consortium’s shareholding is led by Fatima Fertiliser with 34.1pc, followed by Fauji Fertiliser with 33.9pc. Lake City, City Schools and AKD Group each hold 16pc stakes, giving the private consortium full management control of the national flag carrier.
Adviser to the Prime Minister on Privatisation Muhammad Ali described the deal as evidence of Pakistan’s ability to execute complex strategic transactions through a transparent and competitive process, saying it would strengthen investor confidence and reinforce the government’s reform agenda.
A spokesperson for PIA Equity Ltd, the special purpose vehicle formed by the consortium, said the transaction consolidated 100pc private ownership of the airline through an investment package worth about Rs180bn.
In his first remarks as PIA chairman, Lt-Gen Haider acknowledged that public confidence would have to be earned under the new ownership. “The trust of a nation isn’t simply transferred on a document. Trust is earned — mile by mile, smile by smile, year by year,” he said, adding that the airline would seek to preserve PIA’s heritage while building a modern, premium carrier.
In a post on X, PM Shehbaz later praised the civil and military leadership for the landmark achievement. “Alhamdulillah! Today marks another important milestone in Pakistan’s economic reform journey. The successful First Financial Closing of the PIA privatisation transaction, and the transfer of management control to the investor consortium, marks the beginning of a new chapter for our national carrier. With a transformational investment to modernise and strengthen PIA, we are laying the foundation for its revival while reinforcing investor confidence in Pakistan.
“I commend Deputy Prime Minister and Foreign Minister Senator Mohammad Ishaq Dar, and pay special tribute to Field Marshal Syed Asim Munir and his dedicated team, as well as Adviser to the Prime Minister on Privatisation Muhammad Ali, Finance Minister Senator Muhammad Aurangzeb, the Privatisation Commission, and all those whose professionalism, commitment and tireless efforts made this landmark achievement possible.
Published in Dawn, June 30th, 2026