President Asif Ali Zardari granted his approval on Friday to the Pakistan International Airlines Corporation (Conversion) (Repeal) Bill 2026, thereby fulfilling all legal prerequisites for the privatisation of the national airline. This move marks the conclusion of the legislative process required to advance the transfer of ownership of Pakistan International Airlines (PIA).
The bill had earlier received approval from the Senate on 10 June 2026 and the National Assembly on 11 June 2026. Notably, the legislation was passed several months after PIA was acquired by a consortium led by Arif Habib Corporation in December of the previous year.
The consortium secured the top bid for a 75% stake in PIA, offering Rs135 billion in what was hailed as a landmark privatisation effort. This auction represented Pakistan’s first significant privatisation in nearly twenty years and aligns with ongoing efforts to reform loss-making state-owned enterprises under a $7 billion International Monetary Fund (IMF) programme.
In a significant development earlier this year, the Privatisation Commission approved the inclusion of Fauji Fertiliser Company (FFC) in the consortium. The deal was structured to channel Rs124.87 billion directly into PIA’s finances rather than the federal treasury, a key component of Pakistan’s IMF-backed reform strategy. Prior to the sale, the airline was incurring losses of approximately Rs50 billion annually.
Additionally, the Privatisation Commission’s board has recommended revising its fee structure to enhance financial sustainability and support institutional reforms. Government officials have clarified that 92.5% of the Rs135 billion paid for the 75% stake will be invested directly into PIA, while the remaining 7.5%, equating to Rs10.12 billion, will be transferred to the federal government.
The government retains a 25% stake in PIA, which is considered a valuable asset. Under the privatisation framework, the successful bidders have the option to purchase this remaining stake at a later date or allow it to remain under state ownership.
