The Pakistani government, which owns a stake of around 96% in PIA - Pakistan International Airlines (PK, Islamabad International), voted at an extraordinary general meeting held in Karachi on April 20 to transfer the shares to a new holding company. The move is part of a process to shift non-core liabilities and assets off the airline's balance sheet ahead of its planned privatisation.
According to an April 22 Pakistan Stock Exchange filing, shareholders have approved the "bifurcation/separation of the business/undertaking of PIA into two segments/undertakings - the core undertaking and the non-core undertaking - and the transfer to and vesting in PIA Holding Company, the non-core undertaking." The filing did not say what percentage, if any, of shareholders had voted against the proposal.
In its analysis of what is and is not going to the new holding company, ch-aviation recently reported that non-core assets worth PKR24.87 billion Pakistani rupees (USD89.3 million) will be transferred to the PIA Holding Company. The core assets remaining with the airline were valued at PKR146.6 billion (USD526 million). PIA will also retain core liabilities of PKR202.3 billion (USD726 million), while PIA Holding Company will take on long-term financing, trade, employee, and interest liabilities valued at PKR628.5 billion (USD2.26 billion). These will become the responsibility of the Pakistani government and, ultimately, the Pakistani taxpayer.
Meanwhile, PIA's management is banking on clearance to resume flights to European Union airports, with a European Air Safety Agency meeting in May set to decide on the matter. EASA blacklisted the carrier in 2020 following a fatal air crash and fraudulent pilot licence scandal. PIA intends to return to Paris CDG initially before expanding into other EU airports. The EU flight ban has reportedly cost the airline PKR120 billion (USD431 million) in lost revenue.
