Pakistan's Prime Minister Shehbaz Sharif has brought forward the deadline to privatise PIA - Pakistan International Airlines (PK, Islamabad International) by four months to June 2025, although Minister for Economic Affairs Ahad Khan Cheema simultaneously told a visiting World Bank delegation that the flag carrier was in the second rank for privatisation, behind other state-owned enterprises.

According to the newspaper Pakistan Today, the Prime Minister instructed the relevant ministries and the Privatisation Commission to revise the "implementation roadmap" and be ready to handle any legal challenges. He did not say what the hurry was, other than stating a desire to reduce PIA's reliance on state financial support.

Meanwhile, the Dawn newspaper reported that Cheema told the World Bank experts that the privatisation of PIA has been moved to "phase 2" after several failed attempts at finding a suitable investor.

"In the first phase, the government is focusing on the privatisation of power distribution companies (Discos), and in the second phase, Pakistan International Airlines and other SOEs are to be privatised," the minister said.

A 2024 bid to privatise PIA flopped after the sole bidder, Blue World City, offered PKR10 billion rupees (USD36 million) for a 60% stake in the carrier, well below the government's PKR85 billion (USD304 million) floor price. In rejecting the offer, the government said any bid must be respectable.

As before, the government will retain PIA's non-core assets. Unlike before, the buyer will not be saddled with PKR45 billion (USD161 million) of PIA's liabilities, which are primarily outstanding tax debts, overdue Civil Aviation Authority fees, and pension obligations. The government plans to remove these from PIA's balance sheet but has yet to do so.

Before the previous auction, the government had previously transferred a significant proportion of PIA's liabilities to a separate holding company. However, the failure to transfer the full amount deterred many potential buyers.

London slot transfer

Meanwhile, PIA's anticipated return to London Heathrow appears to have been put on ice - for the 2025 summer season at least. Filings with Airport Coordination Ltd, which manages slots at Heathrow and other airports, show PIA has leased its two slot weekly pairs to Saudia (SV, Jeddah International) between April 5 and October 25. Saudia will operate a B787-9 service from Riyadh to fill the slot. PIA is keen to return to Heathrow and certain other UK airports but is awaiting UK Civil Aviation Authority approval. Recently, the European Union lifted a flight ban on PIA, paving the way for Paris CDG flights to resume.

A scandal involving claims of improperly qualified pilots and falsified qualifications was one of the reasons the UK and EU banned PIA from their airspace. Recently, the relatively freshly-elected Pakistani government initiated an investigation into the former politician who made the controversial claims in parliament in 2020.

The new government called claims by former aviation minister Ghulam Sarwar Khan that 150 PIA pilots were flying with questionable qualifications “irresponsible and speculative", causing the carrier financial and reputational harm. However, according to The Express Tribune, the government has decided to drop the probe, believing drawing attention to a historical issue could do more harm than good.