The erstwhile PIA was a proud flag carrier for Pakistan. It had trained much of the Middle East aviation industry. It was not only an airline but also a representation of Pakistani culture and pride. Then it started its journey towards nosediving into loss-making, and billions of rupees piled up as losses, becoming a headache for every successive government in Pakistan.
Pakistan International Airlines was privatised on 23 December 2025 and sold for Rs135 billion to the Arif Habib-led consortium. Last year, the bid failed because there was only one bidder, Lucky Group, which offered only Rs 10 billion against the government’s offer price of Rs 85 billion. This time, the government fixed the reserve bid price at Rs100 billion. Air Blue of Khaqan Abbasi offered only Rs26 billion and was knocked out in the first round. The bidding competition was televised openly. Lucky Group fixed the last bid price at Rs134 billion, whereas the Arif Habib-led consortium offered Rs135 billion and won the bid, immediately congratulated by Lucky Group. The privatisation of PIA is being appreciated by everyone, whether government ministers or businessmen; the reason might be its continued accumulation of losses every passing year.
Muhammad Ali, the Advisor to the Prime Minister on Privatisation, clarified that PIA’s valuable properties, including the Roosevelt Hotel in New York and the hotel in Paris, are not part of the privatisation deal. He explained that these assets will remain under government ownership. He also informed that three major airports will be offered to private companies for long-term management. The purpose of this step is to improve airport services, efficiency, and infrastructure while keeping ownership with the government.
Chaudhry Manzoor of the PPP, the government’s main coalition partner, strongly opposed the privatisation of PIA. He raised an interesting point: when people sell their own goods, they usually highlight their strengths, but the government is doing the opposite by emphasising negative aspects of PIA, even though it is now making a profit. He said that the government has sold PIA at a very low price. He shared the following information: he said that PIA owns properties in Lahore, Karachi, Islamabad, and Multan worth about Rs50 billion. Its transport vehicles are worth around Rs 10 billion, and its furniture and fixtures are valued at about Rs 55 billion. PIA’s aircraft are worth roughly Rs100 billion. Altogether, these assets total about Rs165 billion. In addition, PIA owns foreign properties, especially the Roosevelt Hotel in New York and other hotels, which are worth billions of rupees.
The government divided Pakistan International Airlines into two separate entities: PIA Holding Company and PIA Airline Company. The main purpose of this split was to make the airline more attractive for privatisation and to manage its financial problems more effectively. Under this arrangement, PIA Holding Company keeps the heavy financial burdens, such as old loans, large debts, and non-core assets like land and buildings. This means that the major liabilities are separated from daily airline operations.
Instead of allowing PIA to operate independently and transparently, governments repeatedly interfered in its affairs for political gains
The PIA Airline Company, on the other hand, is responsible only for running flight operations, managing staff, aircraft, and customer services. By removing most of the debt from the airline company, the government hopes it can operate more efficiently, reduce losses, and improve performance. This separation is intended to make the airline financially cleaner and easier for private investors to take over or partner with. However, critics argue that simply splitting the company will not solve deeper issues like corruption, political interference, and poor management unless strong reforms are also implemented.
PIA’s flights to Europe were stopped because of an irresponsible statement made by Ghulam Sarwar Khan, who was the Aviation Minister during the Imran Khan-led government. His statement raised serious concerns about pilot licensing, which led European aviation authorities to ban PIA from operating flights to European destinations. This decision caused heavy financial losses for PIA, as European routes were among its most profitable. These European routes have now been reopened after the ban was lifted. With flights to Europe operating again, PIA has regained access to an important source of income. This means the airline now has a better chance of earning profits and improving its financial position.
PIA’s decline did not happen suddenly; it is the result of long-standing internal problems. Over the years, corruption and favouritism have become common, with jobs and decisions often given based on personal connections rather than merit. Political interference has also played a major role, as governments frequently interfered in airline operations, appointing unqualified leaders and using the airline for their own interests instead of running it as a professional business.
Because of poor management and bad decision-making, PIA has accumulated massive debt worth billions of rupees. The airline struggles financially and often cannot afford spare parts or proper maintenance. As a result, many aircraft are old, poorly maintained, or completely grounded, reducing the number of planes available for flights. At the same time, the airline employs far more staff than it needs, which increases expenses without improving service.
All these issues lead to frequent flight delays and cancellations, higher operating costs, and poor customer service. Passengers lose confidence and choose other airlines that are more reliable and efficient. Even though PIA was once one of the world’s leading airlines, these deep and ongoing problems have left it unable to compete with modern, well-managed rivals today.
Therefore, it can be concluded that successive governments have seriously failed in managing PIA. This failure is largely due to their own weaknesses and mistakes. Many governments showed incompetence by appointing unqualified people to key positions and making poor decisions without proper planning or expertise. Corruption also played a major role, as personal interests, favouritism, and misuse of resources were often prioritised over the airline’s long-term health.
In addition, there was a clear lack of political will to run the airline according to laws, rules, and professional standards. Instead of allowing PIA to operate independently and transparently, governments repeatedly interfered in its affairs for political gains. As a result, accountability was ignored, reforms were delayed or abandoned, and the airline continued to decline. This pattern of mismanagement ultimately harmed PIA’s performance, reputation, and ability to serve the public effectively.
Successive governments failed to protect and reform the airline professionally, allowing losses and debt to grow beyond control
For many years, the airline has been spending more money than it earns. Instead of making profits, it keeps losing money every year. Over time, these losses have added up to a very large amount of debt, exceeding PKR 800 billion. Because the airline has to use most of its money to pay back old loans and interest, it does not have enough funds left for important needs. It cannot buy new aircraft or properly upgrade the old ones it already has. Sometimes, it even fails to pay fuel suppliers on time. When this happens, flights get delayed or cancelled, and suppliers lose trust in the airline.
Many jobs and promotions in the airline industry have been given based on personal relationships rather than ability or experience. Friends, relatives, or people with political connections are often hired even if they are not suitable for the job. When unqualified people are placed in important positions, work quality suffers and productivity drops. Corruption also causes money to be wasted or stolen. Instead of being used to improve aircraft, safety, or customer service, funds are misused, which further weakens the airline.
A large number of the airline’s planes are very old. Older planes break down more often and cost more to repair. Because the airline does not have enough money, it cannot always buy spare parts on time or perform proper maintenance. As a result, many aircraft are grounded and unable to fly. This reduces the number of available flights and increases operating costs. It also creates safety concerns and lowers passenger confidence.
Political leaders often interfere in the airline’s management. They influence decisions about hiring staff, choosing routes, and appointing managers. This has caused the airline to hire far more employees than it actually needs. Many of these hires are made for political reasons, not because the airline requires more workers. Paying salaries to this large workforce takes up a big portion of the budget, leaving very little money for improving services or running the airline efficiently.
The airline’s daily operations are poorly managed. Many flights operate with a large number of empty seats, which means the airline spends money on fuel, staff, and maintenance without earning enough from ticket sales. Some routes continue to operate even though they consistently lose money. In addition, customer service is often not as good as that of other airlines. Because of delays, cancellations, and poor service, many passengers prefer to fly with competitors instead.
The airline did not change or improve when the aviation industry evolved. The government allowed more foreign airlines to operate in the country, giving passengers more choices. These foreign airlines usually offer newer aircraft, better service, and competitive ticket prices. Because the national airline failed to modernise and improve its standards, it lost many passengers. Over time, it became harder for the airline to compete and maintain its position in the market.
In conclusion, the privatisation of PIA can be seen as a difficult but necessary step taken in the larger interest of the national exchequer. While PIA once stood as a symbol of national pride and excellence, decades of mismanagement, political interference, corruption, and poor decision-making steadily pushed it into deep financial trouble. Successive governments failed to protect and reform the airline professionally, allowing losses and debt to grow beyond control.
Given these realities, privatisation offers a chance to stop the continuous financial burden on the government and taxpayers. By transferring airline operations to the private sector while retaining valuable national assets, the state can focus on regulation rather than day-to-day mismanagement. If handled transparently and responsibly, privatisation can improve efficiency, service quality, and competitiveness, while saving public money. Although concerns about valuation and accountability remain valid, this step provides an opportunity for PIA to regain stability, as promised by the Arif Habib-led consortium.
Another important point emerges from this discussion. Experience shows that when a public-sector organisation is privatised, its efficiency usually improves significantly. This pattern suggests that the problem is not a lack of skills or resources, but weaknesses in the public-sector system itself. As government institutions often lack strong accountability, performance-based incentives, and effective oversight, employees and management face little pressure to deliver efficient services. In contrast, private ownership links performance directly to profit, survival, and reputation, which encourages better discipline and results. This reality raises serious concerns about how public services are managed and highlights the need for stronger accountability and reform within government institutions.