Pakistan’s government has launched a new campaign to privatize its national airline. Past efforts have proven unsuccessful, but there’s an interesting twist this time around, as the company just reported its first “profit” in decades, and also managed to shed most of its legacy debt issues.
In this post:
Pakistan government privatizing national airline
Pakistan’s government has announced plans to urgently privatize Pakistan International Airlines (PIA). The company is seeking expressions of interest, with the hope of a private party taking anywhere from a 51% to 100% stake in the airline.
Over the past couple of years, Pakistan has secured a $7 billion International Monetary Fund (IMF) bailout, a condition of which is that the country will be more fiscally disciplined. As a result, the government has set up a committee to privatize various government assets, and PIA is among those.
We last saw efforts to privatize PIA in 2024, where the best offer was $36 million for a 60% stake in the company. The government, meanwhile, was looking for over $300 million.
Over the past couple of decades, PIA has been an absolute mess of an airline, racking up an unbelievable amount of losses. From 2020 to early 2025, the airline was even banned from the European Union, after it was discovered that many PIA pilots held fake credentials. Even beyond that, the airline has lacked financial discipline, with bloated employee numbers, an outdated and inefficient fleet, and an uncompetitive onboard product.
Here’s what might make this privatization attempt a bit different than past ones, though. It was recently announced that in 2024, PIA turned its first annual profit in two decades. One can’t help but be a little skeptical of the math being used there, though if it’s true, that shows some significant improvement.
One thing that might make a PIA privatization much more practical is that the government has taken over nearly all of the company’s roughly $3 billion in debt, so that any potential bidder wouldn’t be on the hook for that.
What could a privatization of PIA look like?
Pakistan is a fairly large country (with over 230 million residents), and there’s quite a bit of demand for air travel to and from Pakistan. For one, there’s significant foreign investment in the country, and on top of that, Pakistan exports a huge number of workers to other countries.
At first glance, the most logical investment for PIA would be from one of the Gulf carriers, like Emirates Airline or Qatar Airways. After all, these airlines have significant service to Pakistan, and I’m sure it’s a market they’d like to dominate even more. I would imagine that taking over PIA would come with some favorable air rights as well.
In 2022, there were reports that Qatar Airways was interested in buying a stake in PIA. That would be a logical enough fit, and on top of that, Qatar Airways is known for investing in other airlines. That being said, usually Qatar Airways makes passive investments in airlines that can easily run themselves (like IAG, the parent company of British Airways), rather than taking on airlines like PIA, which need to be rebuilt from the ground up.
It’s also worth keeping in mind how big of a role PIA played in Emirates launching. Emirates started in the mid-1980s with the support of PIA, which provided the airline with technical and administrative expertise, and even provided the airline with its first aircraft. As a matter of fact, Emirates’ two letter airline code is “EK,” and that stands for “Emirates through Karachi,” reflecting that Emirates’ first flight was between Dubai and Karachi.
There’s definitely a lot of potential here for an investment. If a party were interested in trying to get involved with PIA, it would no doubt be an uphill battle. That being said, it might not be impossible? I mean, both Air India and ITA Airways have been privatized in recent years, and in the past, many of us assumed that could never happen.
It still seems that if you were wanting to run an airline in Pakistan, you’d be better off starting from scratch, with new planes, new labor contracts and expectations, etc.
Bottom line
Pakistan’s government is once again looking to privatize Pakistan International Airlines. We’ve seen this attempted several times before, though conditions are more favorable this time around. for one, the government is willing to take over most of PIA’s debt, which addresses a major concern of any potential buyer. PIA also claims to have turned its first profit in around two decades, suggesting the airline isn’t as much of a disaster as it used to be.
It’ll be very interesting to see if any airline group is interested, or if an investment would come from a non-airline firm.
What do you make of the concept of PIA being privatized?
Maybe Air India would invest for a chance to get back access to the Pakistani airspace?
FYI: EK does not stand for Emirates through Karachi, it's simply a web sensation
https://www.facebook.com/theaviatorscafe18/posts/pfbid02wxrCGm5AT6PSHHUzKKmGnSyN9CVWPp8hWx7Br4FprQPRMxRLTXPi4xkHY2bowaxYl?comment_id=1416130625929086&__cft__[0]=AZXOI1abZLuMv00fdRRxBsR74DFsZhdD_YB89PThiIr2DrxXUuDbG8ZaAr5OaswFXBLH52dVRwyvBIeFP1VbMGPDbo29BEtEEAD7SiQKtgK7zDq43FcE0K2E6iuJEVE9JfJAtCnzBSxAOL7X4D992HzzQl8zzvQ8QiDjtDA0gR3fcA&__tn__=R]-R
Maybe the Chinese will invest in PIA, but that’s like burning unnecessary money when they already have the Pakistani military — and its military-business establishment — in its pocket.
The Emiratis and Qataris already have a large proportion of Pakistan’s international traffic. Maybe the Saudis will thrown more money Pakistan’s ways, especially when they aren’t as sure about having the Pakistani nukes at their potential disposal.
The best option for any foreign airline that acquires PIA is probably to transfer assets such as aircraft, gates, and slots to a new company with a new name and logo/livery, new organization and (experienced) leadership, and new business plan and new culture/benefits. Be ready to divest old aircraft and order aircraft like the A220 that offer the new airline a lot of flexibility in terms of routes and capabilities.
If the new airline's senior...
The best option for any foreign airline that acquires PIA is probably to transfer assets such as aircraft, gates, and slots to a new company with a new name and logo/livery, new organization and (experienced) leadership, and new business plan and new culture/benefits. Be ready to divest old aircraft and order aircraft like the A220 that offer the new airline a lot of flexibility in terms of routes and capabilities.
If the new airline's senior management is extremely risk tolerant, consider ordering Comac C900 aircraft if China/Comac is willing to provide strong delivery/performance/reliability/cost and support guarantees. These aircraft would be for Pakistani domestic use and Pakistan-China flights. If confidence in this turns out low, just focus on adding Airbus A220's.
Yeah, because the overblown Canadian regional frankenjet is the answer to every aviation question.
Oh, my... The seats are a blast from the past! It's incredible to see those antiques still in active service on very long flights.
I have been traveling from NY for years and have flown PIA once. I swore never to fly with them again. The problem isn't just outdated fleet. The soft product is horrible. Mismatched trays, cutlery with no attention to detail at all. Plastic everywhere. The cups were the cheapest things I have ever touched. The flight attendants were decent and respectful to everyone. You just can not compete with the likes of Emirates, Qatar and...
I have been traveling from NY for years and have flown PIA once. I swore never to fly with them again. The problem isn't just outdated fleet. The soft product is horrible. Mismatched trays, cutlery with no attention to detail at all. Plastic everywhere. The cups were the cheapest things I have ever touched. The flight attendants were decent and respectful to everyone. You just can not compete with the likes of Emirates, Qatar and Etihad who have gained massive market in the country now due to PIA's banning in the EU and USA. I'd happily stop over and have a slightly longer trip than to fly with PIA again even when they resume service to the US.
The airline needs to be built from the ground up.
Compared to other small South Asian airlines like Biman, SriLankan and Nepal Airlines, PIA has an incredibly outdated fleet. It’s telling that its newest widebody (and they are all 777s) was built all the way back in 2009, with a product to match. At least its A320s are somewhat newer, including some from the defunct Mexican airline Interjet. But the widebodies are appalling.
I could see Emirates or Qatar investing in PIA. Emirates frequencies to Pakistan has actually decreased compared to before the pandemic, woth reductions in a few markets. Meanwhile, Qatar has increased flights to the country in multiple markets. I could see EK making an investment as part of gaining back more market share in the country.
Also, I think there is a market for nonstop flights to/from Pakistan to foreign destinations. Currently, PIA has...
I could see Emirates or Qatar investing in PIA. Emirates frequencies to Pakistan has actually decreased compared to before the pandemic, woth reductions in a few markets. Meanwhile, Qatar has increased flights to the country in multiple markets. I could see EK making an investment as part of gaining back more market share in the country.
Also, I think there is a market for nonstop flights to/from Pakistan to foreign destinations. Currently, PIA has a horrible reputation and track record in most metrics that matter to people for an airline. Yet still, the airline has many passengers flying on its planes to many destinations. Toronto is extremely profitable for the airline and has excellent load factors. That flight is 14-16 hours long with no IFE and the same meal served in Economy for both meal services. There is also a lot of demand for PIA flights to the UK, and many more destinations. While a lot of Pakistanis like to take the ME3, Turkish, or other foreign airlines abroad, there are still people currently flying who value a nonstop flight. That market will definetly grow if PIA is reformed to have even an acceptable product. They don't need to extremely special and innovative. Just have a good track record with safety, service, and reliability, and that itself is enough to pass. PIA has slots at LHR, and established service to foreign markets all around the world. That's worth something.
These past few years, PIA dropped many unprofitable routes and started many other routes that previously did not have connections to Pakistani cities. That definetly helped in their profitability. Whether or not they are able to reform the safety culture remains to be seen. But if a foreign airline invests in PIA, they could just handle the heavy maintenance themselves at DXB or DOH, and also take over Ispahani hangar in KHI for minor maintenance.
Just shut it down and let the ME3 serve the nation and allow foreign low cost carriers to enter the market.
Lowkey PIA should forget about international flying for now, no universe they come up with a way to compete with the ME3. Start by downsizing into a profitable short haul airline with a decent soft product, then try long haul flights again with a competitive hard product to a few, guaranteed profitable routes like Manchester, London, Istanbul, Dubai, maybe interline agreements with ME4, or with BA. Every US Pakistani diaspora I know used to take...
Lowkey PIA should forget about international flying for now, no universe they come up with a way to compete with the ME3. Start by downsizing into a profitable short haul airline with a decent soft product, then try long haul flights again with a competitive hard product to a few, guaranteed profitable routes like Manchester, London, Istanbul, Dubai, maybe interline agreements with ME4, or with BA. Every US Pakistani diaspora I know used to take BA back in the early 2000s, and the UK has a decent population as well. I imagine a PIA codeshare network out of London would make BA a lot more money and be more competitive against the ME3 compared to the one daily ISB flight out of Gatwick
Why would QR want to lose all that feed to BA? That would be disastrous for them, they won't let IAG countenance such a move. PIA could indeed have some arrangement like that either as before with TK (is that still on?) or with another airline outside the big 3- the likes of Egyptair or LOT could work.