In a development that has raised eyebrows and concerns, Pakistan International Airlines (PIA) has received only one final bid for a majority stake in the national carrier. The sole bidder, real estate group Blue World City, submitted an offer of PKR 10 billion (₹ 302.59 crore), significantly lower than the minimum expected price of PKR 85 billion. This underwhelming response has cast a shadow over the government’s efforts to privatize the debt-ridden airline.
The bidding process, announced by the Privatisation Commission in Islamabad on Thursday, saw five other shortlisted bidders back out, leaving Blue World City as the only contender. The Pakistan government is now in talks with the real estate group to explore the possibility of revising their offer to meet the minimum price requirement.
The government’s aim is to alleviate the burden on Pakistan’s ailing economy by selling off loss-making state-owned entities. PIA, along with assets like the Roosevelt Hotel in New York and energy utility companies, are on the list for privatization. However, past attempts to privatize the airline have been met with resistance from labor unions and political parties, leading to the failure of previous attempts under the Shehbaz Sharif government.
The news of the single bid sent PIA shares soaring 3.9 per cent initially before closing the trading session 5.46 per cent lower. This volatility reflects the uncertainty surrounding the future of the airline.
The winning bidder, if Blue World City manages to revise its offer, will be required to invest $500 million over five years into the struggling airline. PIA has not generated profits for nearly two decades and was forced to scale back operations last year due to a shortage of funds for fuel.
Blue World City’s chairman, Saad Nazir, outlined their plan to revive PIA by leasing aircraft and bringing in Chinese and Turkish investors with expertise in the industry. The group aims to acquire a 60 per cent stake, leaving the remaining 40 per cent with the government.
The five groups that opted not to bid included Arif Habib’s company, Lucky’s YB Holdings Pvt, Air Arabia’s Fly Jinnah, domestic airline Airblue, and Pak Ethanol Pvt.
One of the major challenges PIA faces is the ban on its flights to the European Union since 2020 due to concerns over fake pilot licenses. Amir Mahmood, financial advisor to Blue World City, expressed hope for a resolution to this issue, acknowledging its importance for the airline’s growth.
In a move to facilitate the sale, the Pakistan government transferred approximately three-fourths of PIA’s total debt of PKR 83,000 crore ($3 billion) to its books.
The future of PIA hangs in the balance as the government grapples with this single, low bid. The next few weeks will be critical in determining whether Blue World City will revise its offer and if the government will accept it, ultimately shaping the fate of Pakistan’s national carrier.
