Pakistan's endeavor to privatize its struggling national airline, Pakistan International Airlines (PIA), encountered a setback as the sole bidder, Blue World City, a real-estate development company, proposed only PKR 10 billion for a 60% stake, well below the government's minimum expectation of PKR 85 billion. The bidding process, which took place at a luxurious hotel in Islamabad and was televised live on PTV, highlighted the government's push to offload loss-making state enterprises as part of Pakistan's agreement with the International Monetary Fund (IMF) to secure financial assistance.
Despite six firms being shortlisted in June for the sale of PIA, only Blue World City advanced to the final bidding phase. The Privatisation Commission has urged the bidder to increase its offer to meet the set price, but Blue World City's Chairman, Saad Nazir, responded cautiously, implying the potential involvement of Chinese and Turkish investors with aviation expertise if the bid progresses. Pakistan's government had initially intended to sell between 51% and 100% of its shares in PIA, a move aimed at addressing the airline's mounting debt and operational challenges, despite its assets being valued at around PKR 152 billion.
However, the significant obstacle for potential investors lies in PIA's sizable workforce, comprising over 7,100 employees, including approximately 2,400 daily-wage workers. This presents a substantial challenge for investors seeking to revamp PIA and turn it into a profitable entity, necessitating significant investments and resources. Additionally, PIA has been grappling with various issues, including an EU ban in 2020 due to revelations of pilots holding fake licenses, leading to the airline's exclusion from European airspace, along with an aging fleet and a history of financial hardships. Consequently, the privatization of PIA appears increasingly uncertain, reflecting the broader complexities Pakistan faces in restructuring state-owned enterprises amidst financial pressures.