Pakistan Plans Major Overhaul of PIA through Public-Private Partnership

Introduction:

The Pakistan government has outlined a major plan to restructure and revive the financially strained Pakistan International Airlines (PIA) under a public-private partnership model. The plan involves transferring assets and liabilities to a new holding company, selling shares in the international market, and streamlining operations to address the national carrier’s debt and losses.

Key Plan Details:

Under the PIA revival plan, a new holding company will be established, and the assets and liabilities of the national carrier will be transferred to it. The PIA will operate as a debt-free subsidiary within the holding firm.

Incorporating Public-Private Partnership:

The plan entails selling 40% of the shares in the international market to operate the national airline under a public-private partnership model. The management of the airline will also be outsourced as part of this approach.

Foreign Consultation and Transparency:

To ensure a transparent and effective restructuring process, the government has decided to engage a foreign consultant to oversee the implementation of the plan.

Phased Approach:

The PIA revival plan will be executed in phases, with completion expected by 2025. The initial phase involves registering the holding company with the Securities and Exchange Commission of Pakistan (SECP) to separate the airline from its debt and losses.

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Challenges and Losses:

The PIA has faced significant challenges, including financial losses and debt reaching Rs742 billion. The national carrier’s assets are valued at Rs130 billion, with projected losses of Rs850 billion by the end of the year.

Sanctions and Impact:

Previous international sanctions imposed on the Civil Aviation Authority affected PIA’s operations, leading to substantial losses due to bans on UK and European flights. The national carrier incurred collective losses of Rs215 billion as a result.

Conclusion:

The comprehensive plan for the revival of Pakistan International Airlines (PIA) under a public-private partnership model reflects the government’s commitment to addressing the airline’s financial challenges and ensuring its sustainability. Through strategic restructuring and asset management, the aim is to reposition the national carrier for a more efficient and profitable future in the aviation industry.