Pakistan International Airlines (PIA) officially transitioned to new management under PIA Equity Ltd, a special purpose vehicle of the Arif Habib Consortium, on Monday. The handover ceremony was attended by Prime Minister Shehbaz Sharif, Deputy Prime Minister and Foreign Minister Ishaq Dar, and Chief of Defence Forces and Chief of the Army Staff Field Marshal Asim Munir.
Equity Injection and Capitalisation
In a statement, PIA said the transition marked “a bold new chapter of modernisation and global excellence” for the national flag carrier. The airline confirmed that a Rs125 billion equity injection had fully capitalised PIA, positioning it to modernise operations, improve service standards, and preserve its legacy.
“As the new ownership officially takes over today, we deeply understand that the trust of a nation isn’t simply transferred on a document. Trust is earned—mile by mile, smile by smile, year by year. We know this. And we accept the challenge wholeheartedly,” the press release quoted the chairman of PIA Equity Ltd as saying.
Largest Privatisation Transaction
The Ministry of Privatisation stated that the Privatisation Commission had completed the first financial close of PIA's privatisation, describing it as the country’s largest privatisation transaction. The milestone reflects Pakistan’s commitment to structuring complex transactions through a transparent, fair, and competitive process.
“The transaction brings a total investment commitment of Rs180 billion, including Rs125 billion in fresh capital to transform PIA and Rs55 billion payable to the Government of Pakistan,” the ministry added.
Background of the Sale
In December 2025, the government sold its 75% stake in PIA for Rs10.1 billion cash to the consortium, marking the first major privatisation transaction in two decades. The consortium, comprising Habib, Fawad Ahmed Mukhtar, Gohar Ejaz, and Aqeel Karim Dhedhi—renowned Pakistani businesspersons—placed the highest bid of Rs135 billion for the 75% shares in the 13th round of open auction, beating another consortium led by Muhammad Ali Tabba.
This was the second attempt to sell PIA in over a year and the first successful transaction since 2005 when the government sold K Electric, the country's largest power distribution company. Prime Minister Shehbaz Sharif had desired that PIA be sold for Rs200 billion.
Auction Dynamics and Incentives
The Arif Habib Group took an aggressive approach compared to its competitor, which added Rs250 million in each of the first eight rounds. After the eighth round, the Tabba group sought a half-hour break to consult internally before finally congratulating Arif Habib when the price reached Rs135 billion.
To ensure the second attempt succeeded, the government waived 18% sales tax on aircraft leases, provided Rs36 billion in tax credits to bidders, and extended the timeframe to clear over Rs33 billion in liabilities owed to the Federal Board of Revenue and the Civil Aviation Authority.
