Islamabad: The board of directors of Pakistan International Airlines (PIA), freshly constituted, has given the green signal to the long-anticipated privatization and restructuring plan, marking a significant step in the airline’s transformation journey.
In its 83rd meeting convened on March 25, the PIA board of directors endorsed the scheme of arrangement for the airline’s privatization and restructuring, as announced officially. The approval sets the stage for further coordination with the Securities and Exchange Commission of Pakistan (SECP) to navigate the regulatory aspects of the process.
Sources familiar with the matter indicated that the meeting also delved into various proposals concerning the fate of the organization’s employees, highlighting the comprehensive approach taken in charting the airline’s future trajectory.
The privatization of PIA will be in accordance with the conditions of the IMF, and by June, the issuance of an LOI for the privatization of PIA can be initiated. The process of privatization will be completed in June or July. PIA’s losses and loans have reached up to Rs. 700 billion, and the national airline is liable to commercial banks for loans of up to Rs. 270 billion.
The decision to privatize PIA comes amidst a broader push for economic reform, with the government aligning its efforts with the terms of a $3 billion bailout agreement reached with the IMF in June 2023. The caretaker administration, vested with the mandate to address pressing economic challenges, has spearheaded initiatives to meet budgetary targets and revitalize key sectors.
The reconstitution of PIA’s Board of Directors, which had remained inactive since October 2023, underscores the renewed impetus towards effecting transformative changes within the airline. With the federal cabinet’s recent approval, the board assumes a pivotal role in steering major decisions concerning the company’s future.
Privatization Minister Fawad Hasan Fawad expressed confidence in the progress made, highlighting the government’s commitment to executing reforms that had eluded past administrations. The plan envisages offering a 51% stake with full management control to prospective buyers, accompanied by measures to segregate the airline’s debts into a separate entity.
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