The bidding phase for the privatization of Pakistan International Airlines (PIA) has officially begun, with three pre-qualified bidders submitting their offers, marking the completion of the first phase of the process.

This marks a major step in the government’s economic reform agenda as it seeks bids exceeding Rs100 billion for a controlling stake in the airline.

According to official details, three major Pakistani business groups are competing to acquire PIA. These include Airblue, the Arif Habib Group, and a consortium led by the Lucky Cement Group.

The government plans to sell 75% of PIA’s shares as part of the privatization process.

Transaction Manager Abdul Basit briefed the media on the procedure, stating that all shortlisted bidders were granted access to the relevant data and that bids are being verified today. He explained that the bidding will take place in two rounds: bids will be submitted in the first session, while the sell bids will be opened in the second session.

The sealed bid box was displayed in front of cameras to ensure transparency.

Bids to be opened at 4:30pm

The Lucky Cement Consortium was the first to submit its bid, followed by representatives of the Airblue Group and the Arif Habib Consortium. According to officials, the bids will be formally opened at 4:30pm in Islamabad.

Meanwhile, Advisor to the Prime Minister on Privatization Muhammad Ali, speaking to Samaa TV, expressed optimism about the process, calling PIA’s privatization one of the country’s largest economic activities.

He noted that no major privatization has taken place in Pakistan over the past 20 years, congratulated all stakeholders on successfully collecting the bids, and said he was hopeful that strong offers would lead to meaningful investment in the national airline.

The process of determining the reference price for the privatization of Pakistan International Airlines (PIA) is underway, as an important meeting of the Privatization Commission (PC) Board continues in Islamabad. The meeting is being held to conduct a detailed review of the proposed reference prices for PIA, with the aim of ensuring a transparent and orderly privatization process.

The special meeting of the Privatization Commission Board is being chaired by the Prime Minister’s Adviser on Privatization, Muhammad Ali. During the session, the board is carefully evaluating all relevant factors before finalising its recommendation on the reference price for PIA’s privatization.

Once approved by the board, the recommended reference price will be presented to the Cabinet Committee on Privatization later today for its approval. Following that, the reference price will be placed before the federal cabinet for final ratification.

Govt hopeful of strong financial return

Officials expect the bidding to generate more than Rs100 billion. Most of the proceeds will be directed toward rehabilitating and reviving the struggling national carrier.

The privatization is being positioned as a turnaround strategy rather than a sell-off, with the majority of funds earmarked for operational recovery.

Five-year business plan

A comprehensive five-year business plan for PIA has already been finalized. Under this plan, 92.5% of the privatization proceeds will be spent directly on the airline’s revival.

Key targets include expanding the fleet from 18 aircraft to 38 following privatization.

To encourage growth, the government will provide an 18% GST exemption on leasing new aircraft. This incentive is aimed at reducing costs and improving the airline’s operational capacity.

Also Read: PIA privatization expected to fetch over Rs100bn

Passenger numbers are projected to rise from four million to seven million annually as services and routes expand.

Govt absorbs massive liabilities

One of the biggest hurdles to privatization has been PIA’s debt. The government has now taken over the airline’s liabilities and loans totaling Rs654 billion.

Officials say resolving the debt issue was crucial in restoring investor confidence and attracting serious bidders.

PIA employees have been given job security for one year after privatization. The assurance is intended to ease concerns among staff during the transition period.

Beyond the first year, workforce decisions will be guided by the airline’s restructuring plan.

Privatization a key reform

Advisor to the Finance Minister Khurram Shahzad told Samaa TV that privatization is a vital reform, stressing that the state’s role is not to run commercial businesses.

He said development and efficiency are the core objectives of privatization, pointing to the recent privatization of First Women Bank as another example.

Officials acknowledged that last year’s PIA privatization bid faced multiple problems. Investor concerns have since been addressed through policy adjustments.

Also Read: PIA privatisation bidding for 75% stake set for tomorrow

The IMF was kept on board regarding tax-related matters, and only after resolving the debt issue did investors come forward with serious interest.

Crucial test for reforms

With strong consortiums now participating, the PIA privatization is being seen as a litmus test for Pakistan’s broader reform agenda.

The outcome of the bidding process is expected to shape the future of the national airline and influence investor confidence in upcoming privatization efforts.

Meanwhile, Privatization Commission Chairman Muhammad Ali on Monday noted that the bid will be based on 75% of PIA’s shares, while 25% will remain with the government. Speaking on Samaa TV's programme “Nadeem Malik Live”, Muhammad Ali said the government expects a bid of more than Rs100 billion for PIA.

The privatization advisor explained that the government will receive 5% of the amount bid for the 75% shares. He said bidders will submit two figures: one for how much they will pay to the government and another detailing how much they will invest directly into PIA.

“We will ensure the money goes to PIA for revival, while the government also receives its share,” he said, adding that investment safeguards are central to the process.