Bidding Process for PIA Rescheduled to October 31

ISLAMABAD: The bidding process for the struggling Pakistan International Airlines Corporation Ltd (PIACL) has been postponed to October 31, 2023. This delay comes as bidders requested additional time to prepare for the bidding, which was originally set for October 1. The Privatisation Commission has not made an official announcement regarding this change, but Secretary Privatisation Usman Akhtar Bajwa confirmed the new date.

PIACL is the first state-owned entity slated for divestment under the government’s policy framework aimed at reducing losses and improving efficiency. The Privatisation Commission has prequalified six bidders, including Fly Jinnah, a consortium led by YB Holdings (Pvt) Ltd, Airblue Ltd, a consortium led by Pak Ethanol (Pvt) Ltd, Arif Habib Corporation Ltd, and Blue World City. These bidders are now in a position where they cannot alter their consortiums.

Privatisation Minister Abdul Aleem Khan has expressed optimism about the potential for profit from PIACL, stating that the airline possesses excellent potential and merely requires fresh investment to turn its fortunes around. The reserve or floor price for the bidding will be determined and approved by the federal cabinet prior to the bidding process. Additionally, the cabinet will decide what percentage of the bid will be allocated to the government and what portion will be reinvested into PIACL.

As the bidding process approaches, senior officials from the Privatisation Commission have informed the National Assembly Standing Committee on Privatisation that the privatisation of PIA is nearing its final stages. However, potential bidders are still concerned about several issues, including the need for significant investment to restore PIA to a regular operating status and the current ban on PIA operations in Europe.

Furthermore, the privatisation secretary has indicated that once the 'Buy-side due Diligence' for PIA is completed, the bidding process will be broadcast live after receiving cabinet approval. This transparency is expected to build trust among potential investors.

In 2023, PIACL reported a staggering loss of Rs75 billion, with its liabilities soaring to Rs825 billion against total assets of Rs161 billion. This financial strain underscores the urgency of the privatisation process and the need for a strategic overhaul of the airline.

As the new bidding date approaches, stakeholders and the public alike will be watching closely. The outcome of this process could significantly impact not only the future of PIACL but also the broader aviation sector in Pakistan. With the right investment and management, there is hope that PIA can regain its status as a competitive airline, benefiting both the economy and the traveling public.