The Pakistani government will reportedly try to sell PIA - Pakistan International Airlines (PK, Islamabad International) to a Gulf government in the wake of a failed auction late last month. Multiple outlets say the government is working on a plan to sell between 51% and 100% of PIA to either Qatar or Abu Dhabi under a government-to-government (G2G) agreement.

This follows the government this week formally rejecting a lowball PKR10 billion rupee (USD36 million) bid for the carrier in the October 31 auction. Despite pre-approving six potential buyers, only one party, a local real-estate development company called Blue World City, submitted a bid. The Pakistani government had set a reserve price of PKR85 billion (USD305.7 million).

Since then, several unvetted parties, including entities associated with Pakistani provincial governments and a consortium of unidentified offshore Pakistani businessmen, have expressed interest in buying PIA. However, none of the interested parties have said how they would pay for PIA or provided any details of their financial and operational capacity to run the airline on an ongoing basis.

A series of meetings between government departments and agencies was held in Islamabad earlier this week. The government still wants to privatise its lossmaking airline but is changing tactics. Among the changes, the government's Strategic Investment Facilitation Council (SIFC) is considering inviting expressions of interest from foreign investors, specifically the Qatar or Abu Dhabi governments or entities associated with them. The provisional deadline for responses is November 30.

Earlier this year, ch-aviation reported that several Gulf governments, including those from the United Arab Emirates, Saudi Arabia, and Qatar, were in early stage talks with the Pakistani government about taking a stake in PIA. However, those talks came to naught, and all the pre-approved bidders were local entities, although some were consortiums with international participants.

Meanwhile, PIA is hoping a November 19 meeting of European Aviation Safety Committee (EASC) officials will result in them lifting a ban on Pakistani carriers flying into EU airports. The EU imposed the ban in mid-2020 following the crash of a PIA A320-200 near Karachi International in May that year and an issue with fake pilot licences.

Pakistan’s Civil Aviation Authority has submitted a plan to the EASC addressing safety concerns in an attempt to lift the ban and allow PIA to resume flights to EU airports. However, in May the European committee opted to maintain the flight ban following a detailed on-the-ground safety audit by EU officials in late 2023. The officials found the PCAA deviated from established safety procedures and that there was significant understaffing in the agency's flight standards directorate, among other things.

Services to Europe made up a significant portion of PIA's revenues, and the ongoing flight ban is cited as a major reason why the carrier continues to lose money.