After seven decades as a state owned airline in Pakistan, PIA has finally been sold to private players at a whopping cost of PKR 13,500 crores. The bid was put forward in the widely publicised auction and was broadcast live by the government. This marked the second attempt to privatise the PIA by the government.
Arif Habib Limited (AHL), a Karachi-based securities brokerage, led the winning consortium in the auction, which included AKD Group Holdings Limited, fertiliser manufacturer Fatima Fertiliser, private school network City Schools, and real estate firm Lake City Holdings Limited. FFC (Fauji Fertilisers Corporation), a military-owned and publicly listed company, also joined the consortium after withdrawing its previous bid.ย
Previous attempts at privatising the PIA had been unsuccessful, when a single independent bid of $36 million fell short of the governmentโs $305 million price.ย
Military-linked entity emerges as leading contender
Among the winning consortium was Fauji Fertilizer Company (FFC), which holds a 33.9 per cent stake. It stands as one of Pakistan’s largest fertilizer companies, run under the Fauji Foundation, established by the Pakistan Army.ย
The Fauji Foundation’s administrative structure is closely linked to Pakistan’s military establishment. Its Committee of Administration, the organisation’s highest decision-making body, is chaired by the Defence Secretary and includes senior serving officers from the Pakistan Army, Navy and Air Force, including the Chief of General Staff, Quartermaster General, Adjutant General and other top military officials.
Entry of the FFC in the deal has once again brought the Pakistan Army’s influence over the country’s economy into focus. The development has also reignited questions over the military’s role in Pakistan’s key economic decisions.
Military’s growing economic footprintย
The partnership between Arif Habib and Fauji Fertilizer Company can be seen as another sign of the Pakistan Army’s growing influence over the country’s economy.ย
Following recent regional developments, Army Chief Field Marshal Asim Munir is being viewed as playing a bigger role in the intrusion of the military in the corporate sector of Pakistan.
Prime Minister Shehbaz Sharif also thanked Field Marshal Asim Munir for the role played by the Special Investment Facilitation Council (SIFC) in the PIA privatisation. The remarks have renewed debate on how the Pakistan Army is undermining political institutions in the country.
Why is Pakistan selling its national airline?
PIA’s decline had been building for decades. From the 1990s onwards, the airline was hit by mounting losses, poor management, ageing aircraft and maintenance issues, pushing it deeper into financial distress.
The situation worsened in 2020 when a PIA passenger plane crashed in Karachi, killing at least 97 people. During the investigation, Pakistan’s aviation minister informed Parliament that more than 260 of the country’s 860 active pilots had either fake licences or had cheated in their examinations, as per BBC. The twin setbacks badly hurt the airline’s reputation and strengthened the case for its eventual privatisation.
Written by Bhavye Dhalla. Bhavye is an intern with IndiaTV Digital.
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