PIA privatisation can avert Rs259 billion projected losses: aviation minister

• Minister says PIA operations may be transferred to private sector.
• Emphasises necessity of FDI, says airline facing debt of Rs742bn.
• Senate refers bill to relevant standing committee for further perusal.

ISLAMABAD: Minister for Railways and Aviation Khawaja Saad Rafique has warned that the Pakistan International Airlines (PIA) may endure alarming losses of Rs259 billion by the year 2030 if urgent corrective measures are not implemented, including transfer of its administrative control to the private sector. 

He made these comments while presenting “The Pakistan International Airlines Corporation (Conversion) (Amendment) Bill, 2023” for passage in the Senate on Friday.

The federal minister emphasised the necessity of Foreign Direct Investment (FDI) and granting administrative control to the private sector to sustain PIA, saying that the airline is facing a daunting debt burden of Rs742 billion.

Rafique also said that the bill would make the PIA a holding company, adding that the upcoming government will decide on the percentage of PIA shares to be given.

The minister also said that he was not in favour of privatisation, however, the PIA is facing a loss of Rs110 billion annually and its entire revenue is being spent on the debts.

Former federal minister for Aviation Ghulam Sarwar Khan’s reckless statement has resulted in PIA incurring losses amounting to Rs71 billion in the European Union and United Kingdom sectors, he added. 

However, due to severe opposition from senators, Senate Chairman Sadiq Sanjrani referred the standing committee concerned, stating that the injection of FDI and administrative control to the private sector was essential to make PIA a profitable entity. 

The Senate chairman referred the bill to the relevant standing committee for further perusal. 

The bill proposes an amendment to Section 3 which says "the shareholders of the company shall be deemed to own and hold the same number of fully paid shares with such rights and privileges, including as to class, kind and face value, as they owned and the Federal Government may, during the validity period and by notification in official Gazette, issue fresh shares or cancel any shares as it may deem fit."

Moreover, the bill also proposes an amendment to Section 4, which says "Representation in the management of PIA and its subsidiaries shall be proportionate to shareholding."

"The procurement, rent and lease of aircraft and parts thereof and such other items relating thereto shall be made in the prescribed manner notwithstanding anything contained in the Public Procurement Regulatory Authority Ordinance, 2002 (XXII of 2002) and rules and regulations made thereunder," it added. 

— With input from APP.