ISLAMABAD – Pakistan’s efforts to privatize its struggling national carrier, Pakistan International Airlines (PIA), have entered a decisive phase, with the Privatization Commission Board shortlisting four local consortiums for the next stage of bidding. In a surprising twist, three of the four qualified bidders are from the cement industry, signaling a shift in the strategic interests of major business conglomerates in the country.
The decision comes after a detailed review of technical, financial, and documentary submissions by five competing groups. The evaluation was conducted during a high-level meeting chaired by Prime Minister’s Advisor on Privatization Muhammad Ali, reflecting the government’s urgency to reform state-owned enterprises and offload their financial burden from the public exchequer.
Overview: PIA’s Privatization and National Strategy
The privatization of Pakistan International Airlines is part of a broader government reform strategy aimed at reducing the fiscal burden of state-owned enterprises (SOEs), many of which have become loss-making entities. PIA, in particular, has been incurring billions in annual losses for several years, suffering from mismanagement, corruption allegations, a bloated workforce, and operational inefficiencies.
The Privatization Commission of Pakistan has taken a leading role in facilitating the sell-off of majority shares in PIA, with an offer to transfer 51% to 100% ownership along with management control to qualified bidders. The move is expected to revive the airline’s operations by involving capable private sector players, while generating much-needed revenue for the government.
Qualified Bidders: Cement Industry Surprises Observers
The most notable aspect of the qualification process was the dominance of cement and industrial conglomerates among the shortlisted parties. According to the Privatization Commission, the following four entities have been declared eligible for the bidding phase:
1. Lucky Cement Consortium
This consortium includes:
- Lucky Cement Limited – One of Pakistan’s largest cement manufacturers.
- Hub Power Holdings Limited – A key player in the power generation sector.
- Kohat Cement Company Limited – A well-established name in the cement industry.
- Metro Ventures (Private) Limited – A lesser-known entity, likely involved in logistics or investments.
This consortium is seen as a strong contender, given the financial strength and diversified portfolio of its members. Lucky Cement and Hub Power are both part of the Yunus Brothers Group (YBG), a multi-billion-rupee conglomerate with interests across cement, textiles, energy, and chemicals.
2. Arif Habib-Fatima Group Consortium
The second consortium includes:
- Arif Habib Corporation Limited – A leading investment and holding company in Pakistan.
- Fatima Fertilizer Company Limited – A prominent player in the agricultural chemicals sector.
- City Schools (Private) Limited – One of Pakistan’s largest private school chains.
- Lake City Holdings (Private) Limited – A real estate development company.
This consortium represents a unique blend of finance, education, agriculture, and real estate, possibly aiming to diversify its portfolio by venturing into aviation.
3. Fauji Fertilizer Company Limited (FFC)
Operating independently, Fauji Fertilizer Company Limited, owned by the Fauji Foundation, is also among the approved bidders. FFC is a quasi-military-run enterprise, and its inclusion signals a strong institutional interest in acquiring control of PIA.
Given its robust financials and operational discipline, FFC may be a serious contender if the privatization process focuses on long-term sustainability.
4. Air Blue (Private) Limited
The only airline among the qualified bidders, Air Blue is Pakistan’s second-largest private carrier and is owned by former Prime Minister Shahid Khaqan Abbasi. Its inclusion offers a chance for industry-specific expertise to enter the bidding war, which could be a crucial advantage in managing an airline.
Observers believe Air Blue’s operational experience may provide it with unique insights into how to revitalize PIA’s legacy systems, route planning, and service model.
Next Phase: Bidding Process and Timeline
With four parties now cleared for participation, the process will move to the bidding stage, where technical and financial offers will be evaluated. According to Advisor to the Prime Minister Muhammad Ali, the bidding round is scheduled for the last quarter of 2025 (October to December).
The government plans to sell a majority stake, offering 51% to 100% of PIA’s shares. The final winner will gain management control, enabling them to restructure the airline’s operations, overhaul its workforce, and modernize its fleet.
Privatization Model: Transparency and Reform
The government has emphasized that the privatization process is transparent and competitive, overseen by the Privatization Commission, which follows a standardized procedure for evaluating candidates. The Commission used a Statement of Qualification (SoQ) to assess the financial health, business credentials, and operational plans of interested parties.
According to officials, transparency remains the top priority. The bidding will be supervised by international financial advisors, legal consultants, and regulatory experts to avoid controversies that have historically plagued privatization efforts in Pakistan.
Roosevelt Hotel Privatization: Another Strategic Asset
In a parallel development, the Cabinet Committee on Privatization (CCoP), chaired by Deputy Prime Minister Ishaq Dar, has also approved a joint venture model for the privatization of the Roosevelt Hotel in New York, an iconic property owned by PIA.
As per a report by global advisory firm Jones Lang LaSalle, Pakistan will contribute the land value as capital in the joint venture, while not making any additional financial outlay. An initial agreement will be signed soon, with the final arrangements to be completed by 2027.
The Roosevelt Hotel has long been considered a prime asset, with real estate experts estimating its land and property value in hundreds of millions of dollars. The joint venture model is expected to unlock the property’s value without selling it outright, potentially generating long-term revenue streams for the government.
Challenges Ahead for PIA’s Revival
While the privatization process is a bold step forward, PIA’s revival still faces several significant challenges:
- Massive debt and liabilities, exceeding hundreds of billions of rupees
- Outdated aircraft and poor service quality
- Unionized workforce resistant to reforms
- Loss-making domestic routes required by public service obligations
- International airspace bans, such as the EU ban, which has hurt its global operations
Any new owner will need to inject capital, cut operational waste, and invest in human resources and fleet modernization to turn around the airline.
Political and Public Reaction
The privatization of PIA has drawn mixed reactions. While business leaders and economic experts have welcomed the move as long overdue, trade unions and some opposition parties have voiced concerns about job losses and national sovereignty.
The government, however, insists that privatization is the only way to save the airline. Prime Minister’s Advisor Muhammad Ali recently stated:
“PIA cannot be fixed without private sector expertise and discipline. The government simply cannot afford to continue funding losses year after year.”
Conclusion: A Defining Moment for Pakistan’s Aviation Sector
The inclusion of three major cement companies and leading conglomerates in the bidding for PIA marks a historic moment in Pakistan’s privatization journey. With the process entering its final phase, stakeholders are watching closely to see whether private ownership can rescue the national carrier from its downward spiral.
If successful, the privatization of PIA could set a benchmark for the reform and revival of other state-owned enterprises in Pakistan. It also promises to inject new life into the country’s aviation sector, improve service standards, and reduce the financial burden on taxpayers.
As the countdown to bidding begins, the race for PIA is intensifying—one that could reshape not only the airline’s future but the broader trajectory of Pakistan’s economy.
