Pakistan sweetens deal to sell national carrier PIA after finding no serious buyers

Pakistan is making another attempt to privatize its state-owned airline, PIA, after previous failed attempts to sell it, The Dawn reported.

For the bid, a sole investor submitted an offer of 10 billion Pakistani Rupees, which is much lower than officials’ expectations.

Fewer buyers are interested in this deal due to the 18 percent GST on the purchase of new aircraft.

The National Assembly Standing Committee on Privatisation was informed on Monday that the government had removed GST on the purchase of new aircraft. This is being done to lure investors.

Pakistan International Airlines (PIA) has been grappling with significant financial challenges. The liabilities of PIA are around 45 billion Pakistani Rupees, according to the standing committee.

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Of the total liabilities, Rs 26 billion is owed to the Federal Board of Revenue (FBR) under various taxation charges, Rs 10 billion to the Civil Aviation Authority, and the remaining amount is for pension liabilities.

The committee was informed that a plan would be created to resolve pending issues so that financial burdens do not create an issue for new buyers.

The airline’s non-core assets are not included in the bidding, and a consultant has been hired to develop a separate policy for them.

In October last year, the Pakistani government initiated the final bidding process to sell a 51-100 percent stake in PIA. Out of six pre-qualified groups, only one—real estate development company Blue World City—submitted a bid.

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However, the bid by Blue World City was later rejected in November 2024 for not meeting the government’s minimum price expectations.