For the lack of a better word, the entire journey sounds startling. Just over a year ago, Pakistan’s flag-carrier attracted only a single bid of Rs10?billion for a 60 per cent stake–against a government floor of Rs85?billion. Fast-forward to Tuesday, and the state has secured Rs 135?billion for 75% of the airline.
For decades, talk of privatisation was dismissed as sacrilege; national pride trumping public interest at every turn. No ruling party wanted to bite that political bullet as the fear of inevitable layoffs was simply too steep. Former Prime Minister Imran Khan once acknowledged that PIA had “borne the brunt of past mismanagement, corruption, and vested interests.” However, despite this recognition, his own administration failed to address the issues effectively, allowing the airline’s losses to escalate even further, ballooning to a staggering Rs 414 billion at one point. The national carrier, thus, became a symbol of economic neglect: a legacy drain that none dared fix.
All that changed this week.
Several factors can explain the turnaround. The national flag carrier just posted its first pre-tax profit in two decades and regained EU/UK landing rights when a safety ban on Europe was lifted after four years. Importantly, the state assumed most of the legacy debt and even offered tax concessions and deferred payments as sweeteners to seal the deal.
Prime Minister Shehbaz Sharif’s government publicly treated this as a matter of national urgency. He instructed giving the Privatisation Commission full autonomy and insisted on full transparency and legal due process in each sale. The live auction itself (inviting the nation to watch) was a signal of seriousness not seen before.
Still, the job is far from done. Removing guarantees and unfriendly terms can easily scare off capital because transparency and policy consistency remain sore spots. In 2024, other pre-qualified groups refused to bid, worrying that the government’s ability to stand by agreements was shaky. Unless Pakistan fixes these governance gaps, even a record bid can’t guarantee a true turnaround. Nearly all SOEs have long bled the budget because of opaque management and cronyism, flaws that no sale, however successful, will cure on their own.
The bigger question now is whether this sale will catalyse broader reform. The PIA auction was only the first leg of a planned selloff of banks, power distributors and other loss-makers. Can Pakistan shed its old aversion to private investment? Will the public accept that modernisation sometimes means letting go of nationalistic myths? These are the conversations that must follow.
For now, at least, courage has paid off. A national carrier once thought unsellable has fetched a price that was unimaginable a year ago. That outcome validates the government’s newfound discipline, yet it also leaves us with a test of ensuring the funds are used wisely and that reforms continue. *