In a significant move, Pakistan is moving forward with its strategy to privatise its struggling national airline, Pakistan International Airlines (PIA).
Reports from government officials indicate that the Privatisation Commission (PC) board has recently given its approval to the transaction framework, allowing for the divestment of a 51% stake in the airline.
The approval follows the presentation of the transaction framework by a consortium led by Ernst and Young, as reported by The Express Tribune. The framework aims to divest the majority of PIA’s shares and divide its assets and liabilities.
As a condition of the sale, any foreign buyer interested in acquiring a majority stake in the airline will be required to have a local partner.
During a meeting on January 8, the privatisation body, known as the PC, confirmed that it had taken into account the “legal segregation plan” and transaction structure for divesting PIA’s shares.
“The financial advisors presented a proposal for the legal segregation of the [airline], aimed at the separation of core aviation business and assets for the eventual divestment of core aviation services in the first instance,” stated the board.
Following the board’s approval, the transaction structure will now proceed to the Federal Cabinet for final approval, according to a related statement from the board.
Pakistan International Airlines, a state-owned carrier, has faced financial losses for several years.
In 2020, it was banned from operating in the European Union, the United Kingdom, and the United States due to safety and regulatory issues, including concerns about pilot licensing.