Pakistan has revealed plans to privatize its national carrier, though it’s anyone’s guess if this proves successful.
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Pakistan paves way for national airline to be privatized
Pakistan’s government has this week announced plans to privatize Pakistan International Airlines (PIA). This decision follows Pakistan having secured a $3 billion International Monetary Fund (IMF) bailout in June 2023, a condition of which was that the country would be more fiscally disciplined. As a result, the government has set up a committee to privatize various government assets, and PIA is among those.
The attempt to privatize PIA is just in the early stages, but seems necessary, as the airline has racked up hundreds of millions of dollars in losses over the years. PIA is simply a horribly run airline on just about every level.
Since 2020, the airline has been banned from the European Union and United States, when it was discovered that many PIA pilots held fake credentials. Even beyond that, the airline has no financial discipline, bloated employee numbers, an outdated and inefficient fleet, and an uncompetitive onboard product.
This isn’t the first time that there has been an attempt to privatize PIA. The same thing happened nearly a decade ago, and there was so much backlash from employees that the airline called off those plans.
Suffice it to say that finding a buyer for PIA will be a challenge. Then again, it recently happened at Air India, so maybe PIA will get lucky as well (though in fairness, Air India wasn’t previously quite as poorly run as PIA).
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… maybe?
Bottom line
Following Pakistan’s latest IMF bailout, the government is now looking to privatize many government assets (or in this case, liabilities), including the struggling national carrier. PIA has been mismanaged for so many years, and turning around the airline will be no small feat.
Qatar Airways was reportedly interested in investing in PIA a while back, so I’m curious if that’s still the case, now that the government is looking to sell the airline.
What do you make of PIA being privatized? Is there any hope?
I have flown only once and that was enough.
I just flew in from Dubai ( first time traveled with Qatar Airlines ) great service with very friendly crew.
Qatar jump on it Qatar can revive this unfortunate company.
Good luck Pakistan International Airlines I sincerely hope that there is a buyer.
I think recent merger of air india (49% Tata group n 51 by Singapore airlines) is a best suited model for pia … however it’s true that air India had a better fleet and wider range of travelers both within and outside india . Personally I suggest government should get in touch with emirates or Qatar for a possible merger in collaboration with a local investor. Government should sell its 100% stake and nothing should...
I think recent merger of air india (49% Tata group n 51 by Singapore airlines) is a best suited model for pia … however it’s true that air India had a better fleet and wider range of travelers both within and outside india . Personally I suggest government should get in touch with emirates or Qatar for a possible merger in collaboration with a local investor. Government should sell its 100% stake and nothing should be kept … since the fleet of quite old they may add giving airport (leasing) 3 airports. This will keep their interest in this deal and people of our country get better service from their national flag carrier which is the need of the hour.
Americans like the word privatized. They like it not based on evidence but based on stupid ideology brainwashed into their head.
I see nothing wrong with national airline. In fact, some of the best airlines are national flag carriers including EK and SQ.
It’s sad that Americans have no trust in government. It’s a problem of competence not national vs privatized and there are way more competent government out there.
Would be good to write an article about airline codes what different ones means how they are made etc. like I have always wondered by Qantas is QF and Emirates EK though now I know!
Honestly, knowing AA, I wouldn't be too surprised to see them invest in PIA.
I always thought the K came from the Arabic for airlines, al khutut al jawiya
This article basically says nothing new
Slightly off topic Ben, but have you realized that currently there is not a single passenger flight service between India and Pakistan? That’s despite the fact they hat the two nations, albeit not having the friendliest relations, still maintain diplomatic ties.
It was never like that, as there used to be PIA 747s operating between Karachi and Delhi during the 90s and Indian Airlines (later merged to Air India) also operated between Mumbai and Karachi...
Slightly off topic Ben, but have you realized that currently there is not a single passenger flight service between India and Pakistan? That’s despite the fact they hat the two nations, albeit not having the friendliest relations, still maintain diplomatic ties.
It was never like that, as there used to be PIA 747s operating between Karachi and Delhi during the 90s and Indian Airlines (later merged to Air India) also operated between Mumbai and Karachi on a regular basis.
This is because there is basically no demand for travel between the two countries.
In past years, it was extremely difficult for a Pakistani to get a visa to go to India (and same the other way around, but I've heard the former is more difficult). It was basically only granted for cultural exchange reasons (actors, singers, etc., those in the arts - such as bollywood actors). However, in the past few years, India...
This is because there is basically no demand for travel between the two countries.
In past years, it was extremely difficult for a Pakistani to get a visa to go to India (and same the other way around, but I've heard the former is more difficult). It was basically only granted for cultural exchange reasons (actors, singers, etc., those in the arts - such as bollywood actors). However, in the past few years, India revoked the Pakistani national's visas, and made it nearly impossible for Pakistanis to visit India (I personally haven't heard of any Pakistani national getting approved of a visa since). I believe this is still the policy, as this is the policy of the current Indian administration (which is heavily nationalist focused).
The last nonstop flights were discontinued in 2016 I believe. PIA was the only airline to fly it at the time, as they flew once weekly on each route between Karachi/Lahore and Delhi/Mumbai (KHI-DEL, KHI-BOM, LHE-DEL, LHE-BOM)
There is also only 1 full border crossing between the two countries that is currently available (the Wagah border). There used to be some rail service (2 routes) between the 2 nations, but those routes have been closed since 2019 (when tensions escalated between the countries).
The major issue at PIA is corruption and mismanagement. PIA has only 30 aircraft and more than 12,000 employees. With only 30 aircraft you will expect an airline to have 5,000 employees. Pakistan has a population of 230 million people. There is demand in the country for more flights from better airlines.
PIA can't get privatized soon enough. Every public official and his dog seems to have a finger in PIA. Take just one case (out of many): PIA's failed attempt to implement a new livery featuring a stylized deer. The Chief Justice stepped in and halted the move simply because he didn't like "an animal" representing Pakistan on the national carrier's planes! There was no public complaint against PIA. No case filed against PIA.. He acted...
PIA can't get privatized soon enough. Every public official and his dog seems to have a finger in PIA. Take just one case (out of many): PIA's failed attempt to implement a new livery featuring a stylized deer. The Chief Justice stepped in and halted the move simply because he didn't like "an animal" representing Pakistan on the national carrier's planes! There was no public complaint against PIA. No case filed against PIA.. He acted on his own whim!! Dysfunctional officials trying to run a dysfunctional airline in a dysfunctional nation. That said, the average local I met is actually nicer than your average European.
I hope one of the gulf airlines turns around PIA. I do wonder why Qatar didn’t follow through though. They really need new interiors. They could use a bunch of 787s and A320neos. Looking forward to seeing their planes in JFK and California.
Folks talking about untapped potential, Karachi be like DXB as a hub, etc are forgetting how volatile situation is in Pakistan. This is their 3rd or 4th international bailout in last couple decades, which is in addition to the billions China gave them.
Also, the overall extremism in the country, especially in Baluchistan and Khyber Pakhtunkhwa - about 100 miles from the country’s capital.
30% inflation, power companies in gigantic debt, very frequent power cuts....
Folks talking about untapped potential, Karachi be like DXB as a hub, etc are forgetting how volatile situation is in Pakistan. This is their 3rd or 4th international bailout in last couple decades, which is in addition to the billions China gave them.
Also, the overall extremism in the country, especially in Baluchistan and Khyber Pakhtunkhwa - about 100 miles from the country’s capital.
30% inflation, power companies in gigantic debt, very frequent power cuts. There are ton of infrastructure and structural issues in the country. I’d be surprised if any foreign country is willing to invest in PIA.
only middle eastern airlines like emirates gulf air saudi air qatar airways and Turkish airlines
can buy pakistan international airlines
TK is the best buyer as they are friendly with pakistan
no one from india or asia will buy from pakistan
pakistan s friendly country china can give financial assistance to run the airline
or take over whole company and start operating
Would seem logical for a gulf carrier to subsidize PIA while getting lucrative landing rights and slots in return. No one is banging down the door to take over PIA with its lousy reputation, hostile workforce, and is a money loser.
You simply can’t compare Air India and PIA. Even if Air India was run worse than PIA, it would have found the investor anyway.
Previous attempts of Air India were unsuccessful purely because of Government’s reluctance on divesting 100% of AI holding. Additionally, some harsh conditions were the part of the sale proposal around crucial points.
Secondly, India is one of the most lucrative and fastest growing aviation market, there is no competition...
You simply can’t compare Air India and PIA. Even if Air India was run worse than PIA, it would have found the investor anyway.
Previous attempts of Air India were unsuccessful purely because of Government’s reluctance on divesting 100% of AI holding. Additionally, some harsh conditions were the part of the sale proposal around crucial points.
Secondly, India is one of the most lucrative and fastest growing aviation market, there is no competition between India and other developing economy in this regard.
Thirdly, India has wealthy business houses for the likes of Tata. If Tatas weren’t as much charitable, then Tata group inarguably would be the most valuable publicly traded conglomerate. That would also make Tatas bigger than many OECD (developed) economies combined.
True.
PIA used to be a far better airline than Air India in the 1980s and early 1990s but things have gone downhill since.
I agree, though both countries are problematic, India is financially and politically more stable
" it was discovered that many PIA pilots held fake credentials. Even beyond that, the airline has no financial discipline, bloated employee numbers, an outdated and inefficient fleet, and an uncompetitive onboard product."
Guessing the above won't make it into the investor deck :D
I think we need a new trip report from Lucky on PIA, just to see if it's even worse than when he flew it the last time.
Great article Ben. Ever since Gary's blog started turning into the National Enquirer of people misbehaving on airplanes and in airports, it's nice to see someone else still sticking to news and analysis of the industry.
"Gary's blog started turning into the National Enquirer of people misbehaving on airplanes and in airports"
Live and Let's Fly as well.
Ever since covid LALF went downhill. And there is no quality control over Kyle's posts.
I no longer check Live and Let's Fly. He's as sensationalized as Gary, but much more angry. These days I only read Ben and Frequent Miler. These gives me about 85% of the news I need, but also saves me from the rest of the freakshow that these other blogs have turned into.
I think if someone will buy PIA, it will be Emirates. There is a huge amount of potential for the carrier. The country as a whole has a lot of demand for air travel, as Ben pointed out. There are also a lot of Pakistanis in foreign countries, most of which have family in Pakistan and travel back to see them every so often. Pakistan is the 5th most populous country in the world (behind...
I think if someone will buy PIA, it will be Emirates. There is a huge amount of potential for the carrier. The country as a whole has a lot of demand for air travel, as Ben pointed out. There are also a lot of Pakistanis in foreign countries, most of which have family in Pakistan and travel back to see them every so often. Pakistan is the 5th most populous country in the world (behind Indonesia, U.S., China and India). It is also geographically located well for connections. Karachi airport could easily be like DXB (and it used to be a stopover hub for all the major European airlines not too long ago, before the current generation long range aircraft came along).
Correct me if I'm wrong, but I believe EK also invested in and turned around SriLankan, so this is something they have done before. Emirates was also interested in flying domestically within Pakistan a while back (but it got rejected to help the countries' own airlines).
EK has also been losing out on market share to QR (and Turkish to some extent) in the past few years in Pakistan. They have decreased their flights to the country, while Qatar's flights to the country are at an all time high (more than pre-covid). This could be a way for EK to gain back market share. And EK has an excellent reputation within Pakistanis (some will say it isn't what it used to be a few years ago though - but I haven't flown EK in over 6 years so I can't say).
The problem with this plan is that Etihad and Qatar have all the money. EK is probably not in any financial position to pull this off.
Pakistan has a larger population than Brazil and there is a lot of reason to want to own the overwhelmingly dominant carrier there . . . if the owner is allowed to restructure it and get rid of the dead weight. With corrupt Imran Khan in jail and the most illiberal forces on the run, and having come close to rock bottom, while simultaneously filled with envy at the massive growth of India that liberalization...
Pakistan has a larger population than Brazil and there is a lot of reason to want to own the overwhelmingly dominant carrier there . . . if the owner is allowed to restructure it and get rid of the dead weight. With corrupt Imran Khan in jail and the most illiberal forces on the run, and having come close to rock bottom, while simultaneously filled with envy at the massive growth of India that liberalization there has brought, Pakistan might be the Cinderella story of the developing world in the coming years.
Wow, I had no idea that Pakistan had more people than Brazil. I was about to correct you but then googled it... I would have placed them at ~170 million people rather than 230. Fascinating.
Unfortunately, Pakistan is a country which punches well under its weight economically because its been a political mess filled with corruption and driven my religious extremism, while Brazil is a much more functional and liberal place in comparison. But Pakistan has huge untapped potential, and a glance over the Partition border in what used to be the same country with the same level of prosperity - but not anymore - makes that increasingly obvious and...
Unfortunately, Pakistan is a country which punches well under its weight economically because its been a political mess filled with corruption and driven my religious extremism, while Brazil is a much more functional and liberal place in comparison. But Pakistan has huge untapped potential, and a glance over the Partition border in what used to be the same country with the same level of prosperity - but not anymore - makes that increasingly obvious and increases the chances for a change.
You know a country is in trouble when Brazil is described as "functional" in comparison to it. ;)
Wow. So PIA was and is in this mess because of corrupt Imran Khan who was in power for little more than 3 years?
This is a man who built cancer hospitals and universities for common people. He makes one call and folks all over the world ( Pakistanis and others) give him millions to run those hospitals and universities. That is the trust he has.
If he loved money, he could have...
Wow. So PIA was and is in this mess because of corrupt Imran Khan who was in power for little more than 3 years?
This is a man who built cancer hospitals and universities for common people. He makes one call and folks all over the world ( Pakistanis and others) give him millions to run those hospitals and universities. That is the trust he has.
If he loved money, he could have gotten billions of British Pounds after his divorce with Jemima Goldsmith. But he did not take a single penny. That is the integrity the man has. While other politicians looted the country and bought properties in foreign lands, he kept doing the charitable work at home. Pakistan is being run by a criminal, corrupt mafia right now while Khan is in jail. The very people he was fighting against. Just shows how powerful this corrupt criminal mafia is. An honest man couldn't survive. Its shameful.
Jemima isn't worth billions of pounds. Her family, maybe, but you don't get money from your spouse's family when you divorce.
Corrupt IK in jail? Lol... media blackout, political coercion, the most sorry state of 'democracy" in the country in the past two decades.. I'm assuming you're ill advised, or your family comes from one of the multi generational corrupt families that have taken turns plundering Pakistan over the decades...
It’s one thing to say Imran Khan is corrupt, but it’s hilarious to think that Pakistans “Cinderella story” will start when the country is being ruled by the brother of a man who has been prime minister off and on since 1990
The country is “clucked”
"With corrupt Imran Khan in jail". What? Imran Khan is corrupt? Don't talk shit man. He ruled for only 3 years. The major issue at PIA is corruption. PIA has only 30 aircraft and more than 12,000 employees.
It seems logical that one of the Gulf airlines would invest in PIA. I think it would pretty ironic to see Emirates investing, given that PIA was the airline that helped Emirates launched flights in 1985.