Pakistan's Privatisation Commission has extended the bidding date for PIA - Pakistan International Airlines (PK, Islamabad International) by one month, setting a new deadline of October 31, 2024. According to a report by Pakistani TV channel ARY News, low bidder interest and unresolved issues are behind the delay. Until the last minute change, pre-bidding deposits from the short-listed bidders had been due by close of business on September 27, with the subsequent auction scheduled for October 1.
The delay follows Privatisation Commission officials briefing senior Pakistani government representatives earlier this week about the sale of the state-owned airline and saying all was on track for the October 1 auction. Nonetheless, several issues have recently arisen that may have dampened buyer interest, including the government confirming that PIA will not get any special tax treatment, government officials told the Urdu News website. This is despite a push by some of PIA's short-listed bidders for changes to Pakistan's tax legislation that would have placed them on an equal tax footing with foreign investors. The tax decision came less than a week before final binding bids to buy PIA were due.
The Pakistani government intends to sell a 60% stake in the state-owned carrier. Aside from no tax breaks, privatisation officials said that sale conditions included retaining PIA's brand and all routes. The buyer will be obliged to recapitalise the carrier, including refreshing and expanding the fleet. Earlier this month, ch-aviation reported that the government wanted the successful bidder to invest PKR80 billion rupees (USD288 million) in the first twelve months and the full USD500 million over three years.
“We have requested the induction of new planes to lower the average age of the fleet from 17 years to ten," Privatisation Commission secretary Usman Bajwa told the National Assembly Standing Committee on Privatisation this week.
The buyer must agree to keep PIA's 7,300-plus employees for at least two years and fully comply with the country's benefits and pensions regime. The government will take on the pension liabilities of some 16,000 former PIA employees.
Fly Jinnah (9P, Karachi International), AirBlue (PA, Karachi International), Arif Habib Corporation Limited, and three consortia led by YB Holdings (Private) Limited, Pak Ethanol, and Blue World City are the six short-listed bidders. All are domestic entities.
According to ch-aviation PRO airlines data, PIA Pakistan International Airlines flies to 32 airports in 12 countries with a fleet 32 aircraft, including seventeen (seven are inactive) A320-200s, three (two inactive) ATR42-500s, six (three inactive) B777-200ERs, two (one inactive) B777-200LR, and four (three inactive) B777-300ERs.
