Govt 'postpones' PIA privatisation bidding until end of October

• Low bidder interest, unresolved issues cited reasons for delay.
• EU's ban on PIA flights to Europe concern for potential bidders.
• EASA likely to "lift ban" on PIA flights to Europe by 2024's end.

ISLAMABAD: The government has decided to delay the financial bidding for the privatisation of the Pakistan International Airlines (PIA) until October 31, sources said in a The News report.

According to the sources, low bidder interest and unresolved issues have been cited as reasons behind the delay.

Previously, the National Assembly's Standing Committee on Privatisation had disclosed that the privatisation process was extended to October 1. But the process has been delayed once again — this time, by a month.

The sources added that the delay may have resulted from issues including unresolved court cases, fleet ageing and civil aviation issues.

This change in plans comes after Usman Bajwa, secretary of the Privatisation Commission, earlier this week, informed the National Assembly’s Standing Committee on Privatisation that the final bid documents were shared with six pre-qualified bidders.

The six consortia that were pre-qualified to bid for a 60% stake in PIA, include:

• Fly Jinnah Limited
• Air Blue Limited
• Arif Habib Corporation Limited
• A consortium led by YB Holdings (Private) Limited
• A consortium led by Pak Ethanol
• A consortium led by Blue World City

Earlier, Turkish Airlines, in a statement to Bloomberg, dismissed a federal minister's claims that the airline had expressed interest in taking over PIA.

Meanwhile, the European Union's ongoing ban on PIA flights to Europe — one of the airline’s most profitable routes, historically — has proved to be another significant concern for potential bidders.

However, during a recent panel meeting, PIA CEO Amir Hayat expressed optimism on this issue, stating that an audit was completed and the European Union Aviation Safety Agency (EASA) is expected to lift the ban by the end of the year.

Furthermore, Bajwa revealed that the final bid documents were uploaded to the Virtual Data Room on September 18, with bidding parties now in the final stages of due diligence.

He had also assured the panel that PIA's current fleet of 20 aircraft is expected to expand to 40-45 planes over the next three to five years.

"We have requested the induction of new planes to reduce the fleet’s average age from 17 years to 10," he stated.

The secretary further emphasised the importance of retaining human resources for two to three years, while safeguarding employee perks and pension entitlements for both current and retired workers.

He noted that government approval would be required if bidders decide to discontinue or sell PIA routes, particularly the key international routes to destinations such as Saudi Arabia, Paris and Canada.

Concerns over the EU ban were raised again, with Bajwa reiterating that the Civil Aviation Authority has made significant progress, and the ban could soon be lifted. These assurances, he confirmed, are included in the final draft of the privatisation agreement.

Additionally, a whopping Rs35 billion has been earmarked for PIA's 7,360 current employees, with pensions for the company's 16,000 retired workers to be covered by the government.

The delay adds to growing uncertainties over PIA’s privatisation process, with bidders closely monitoring developments related to the EU ban and other operational challenges.