KARACHI: The privatization process of Pakistan International Airlines (PIA) is expected to be completed by the first week of October 2024, according to Arif Habib, Chairman of the Arif Habib Group.
Speaking to a group of journalists at the Naya Nazimabad Gymkhana, Habib expressed confidence in the timeline for the PIA bidding process. “We are expecting that the bidding process of PIA would be concluded by the first week of October 2024,” he said.
Habib emphasised that the prospective buyer of PIA would need to induct at least 20 aircraft to the airline’s fleet to run its operations effectively. He believes that with the right strategic interventions, PIA can be transformed from a loss-making entity into a profitable one.
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Regarding the ownership structure, Habib stated that buyers interested in acquiring PIA prefer to purchase 75% of the shares to gain majority control. He also noted that the airline cannot be sold within three years of privatisation.
One of the major challenges facing PIA is its staggering debt burden of Rs 800 billion, including interest payments. Habib said that Rs 600 billion of this debt would be transferred to the holding company, while the remaining Rs 200 billion would be shifted to the buyer. Habib further explained that a significant portion of PIA’s debt is tax liabilities and civil aviation dues. He emphasized that if the buyers are given a considerable period to pay off these debts, it would provide significant relief and contribute to the airline’s turnaround.
“While PIA is an operationally viable entity, if the issues related to debts and employees are resolved after the takeover, it could quickly turn around and become profitable,” Habib said.
The privatization of PIA has been a long-standing agenda, and the successful completion of the bidding process by October 2024 could pave the way for a new era of growth and profitability for the national carrier.
Copyright Business Recorder, 2024
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