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Pakistan has sold a majority stake in its loss-making national airline PIA after years of financial trouble. The privatization, driven by IMF conditions, aims to revive the airline, reduce debt, and attract domestic and foreign investment.
Pakistan's National Airline PIA Sold After Years of Losses
New Delhi: Pakistan International Airlines (PIA), Pakistan's national airline, had been running at a heavy loss for several years. Due to its poor financial condition, mounting debt, and weak management, the government was under increasing pressure to sell it. Finally, the government decided to auction off 75 percent of PIA's shares.
Several Pakistani companies participated in the PIA auction. The highest bid was placed by the Arif Habib Group, which acquired PIA for 135 billion Pakistani rupees.
Other bidders included Lucky Cement, which bid 101.5 billion rupees, and Airblue, which bid 26.5 billion rupees. However, the Arif Habib Group was declared the winner due to its highest bid.
According to the government, 92.5 percent of the total amount received from the auction will be spent on the improvement and restructuring of PIA.
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Currently, PIA has approximately 32 aircraft, including Airbus A-320s, A-330s, Boeing 737s, and Boeing 777s. Due to fewer flights, poor management, an excessive number of employees, and heavy debt, the airline had been consistently incurring losses.
Pakistan's Finance Minister Muhammad Aurangzeb praised the Prime Minister's associates and team for the auction process. He said that a lot of hard work went into reaching this stage and that all the bidders for PIA were Pakistani.
However, critics argue that the country's economy is continuously weakening and that the minister is trying to distract people from the ground realities.
The government claims that this privatization will boost the confidence of local investors, which will subsequently attract foreign investment. Prime Minister Shehbaz Sharif's advisors believe that the privatization of PIA will open up new avenues for investment in the country.
According to Muhammad Ali, an advisor to the Privatization Committee, the government's objective is not merely to sell PIA but to make it self-reliant and strong.
The privatization of PIA is a key condition of the IMF's $7 billion bailout package. The IMF wanted loss-making state-owned enterprises to be either reformed or completely sold off.
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The aim was to end the direct control of the government or the military over these companies and allow them to be run professionally.
The privatization of PIA is a consequence of Pakistan's weak economic situation and international pressure. Now it remains to be seen whether PIA, after being transferred to private hands, will truly become a strong and profitable airline.
