The transfer of Pakistan International Airlines (PIA) to private ownership has been widely welcomed as a step toward reform. However, much of the debate has focused narrowly on the sale price, overlooking deeper structural and governance issues that shaped the outcome.
A closer examination shows that privatisation did not create PIA’s massive financial burden but merely revealed it. Before the sale, the government absorbed more than Rs670 billion in debt and liabilities, effectively shifting the cost of years of mismanagement onto taxpayers.
Read More: PIA privatisation to create jobs, not cut staff, says Arif Habib
PIA’s experience reflects a broader pattern across Pakistan’s state-owned enterprises. Weak governance, patronage-driven boards, and the absence of accountability have allowed losses to accumulate without consequences for decision-makers, turning privatisation into a costly last-resort exit.
The central reform lesson is that ownership change alone is insufficient. Without fixing governance structures and enforcing accountability, losses will continue to be socialised while those responsible face no reputational or professional penalty.
Another key lesson is that privatisation must involve genuine exposure to competition. If a newly privatised firm continues to receive protection, preferential treatment, or implicit subsidies, the reform becomes symbolic rather than substantive.
The case also highlights that many SOEs are simply not viable candidates for privatisation. Prolonged attempts to sell fundamentally unviable entities only deepen losses, making liquidation a less costly and more honest alternative in some cases.
Clarity of purpose is equally critical. The state must decide whether privatisation aims to maximise immediate fiscal returns or to transfer operations to competent owners with sectoral expertise, as the two objectives require very different approaches.
Read More: Government opens bidding for PIA privatisation
Finally, the PIA process exposed serious transparency gaps. Limited public disclosure around valuation, bidding criteria, and post-sale obligations fuelled mistrust and speculation that could have been avoided through clearer communication.
Overall, PIA’s privatisation underscores that sustainable reform depends less on the act of sale and more on governance, competition, transparency, and clearly defined policy goals.