Why is the sale of Pakistan’s national airline stirring a political storm?

Why is the sale of Pakistan’s national airline stirring a political storm? PIA has been sold for $482m to a consortium led by finance mogul Arif Habib. But the military gets a piece, too. Islamabad, Pakistan - After seven decades as Pakistan’s state airline, the government sold a majority stake in Pakistan International Airlines (PIA) earlier this week for $482m in a publicly televised auction, ending years of failed privatisation attempts. Arif Habib Limited (AHL), a Karachi-based securities brokerage, led the winning consortium, which includes AKD Group Holdings Limited, fertiliser manufacturer Fatima Fertilizer, private school network City Schools, and real estate firm Lake City Holdings Limited. Recommended Stories list of 4 items list 1 of 4 IndiGo chaos: Why is India’s largest airline canceling hundreds of flights? list 2 of 4 UK lifts restrictions on Pakistan airlines after five-year ban list 3 of 4 Pakistani pilot scandal list 4 of 4 Deadly skies: Pakistani pilots allege systemic safety failures Following the successful bid, Fauji Fertilizer Company Limited (FFC), a military-owned and publicly listed company, also joined the consortium. The group faced competition from a rival consortium led by Lucky Cement, as well as Air Blue, a private airline. The auction, widely publicised and broadcast live by the government, marked the second formal attempt to privatise PIA. A previous effort in October 2024 collapsed when a single bid of $36m from a private real estate firm fell far short of the government’s $305m floor price. The privatisation of PIA followed pressure from the International Monetary Fund (IMF), which urged Islamabad to offload loss-making state-owned enterprises. Pakistan, currently under a $7bn IMF loan programme , had committed to completing the airline’s privatisation by the end of this year. Here is what is known so far about the sale, the winning consortium, and why the deal has drawn criticism from opposition parties and other quarters. What do we know about the winning bid? On Tuesday, bidding took place in a packed five-star hotel in Islamabad and lasted about 90 minutes, with several breaks. Three parties submitted initial bids for a 75 percent stake in the national carrier. To attract investors, the government restructured PIA last year by hiving off long-term liabilities worth more than $2.3bn into a separate entity. It also offered policy continuity guarantees and tax relief, measures approved by the IMF. In the first round, Air Blue was disqualified from open bidding after offering $94.59m, well below the government’s minimum price of $356.9m. Once the two remaining consortia cleared the floor price, open bidding began. The AHL-led group emerged victorious with a final offer of $482m for the 75 percent stake. At a news conference a day later, Muhammad Ali, the government’s adviser on privatisation, said 92.5 percent of the winning bid, amounting to about $446m, would be reinvested into PIA itself. The remaining $36m would go to the government, which will also retain a 25 percent share valued at roughly $160.6m. Arif Habib later told a private television channel that...

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