A consortium led by the Arif Habib Group on Tuesday acquired the Pakistan International Airlines for Rs. 135 billion, beating out a rival group led by Lucky Cement in a competitive bidding process for the country’s flag carrier.
The winning consortium includes AKD Group, Fatima Fertilizer, The City School and Lake City Holdings. The bidding ceremony was broadcast live nationwide, going into multiple rounds as both bidders kept raising the ante after submitting initial bids above the government’s reference value of Rs. 100 billion.
Earlier this year, the government had approved four potential bidders: the Arif Habib-led consortium; a group led by Lucky Cement; Fauji Fertilizer; and AirBlue. Fauji Fertilizer withdrew from the process earlier this month, though could join the winning bidder, according to Prime Minister’s Adviser on Privatization Mohammad Ali.
The initial bids offered saw the Arif Habib-led consortium propose Rs. 115 billion; the Lucky Cement group bid Rs. 101.5 billion; and AirBlue Rs. 26.5 billion. As AirBlue’s price was below the reference price, it was disqualified with subsequent rounds taking place between Arif Habib and Lucky Cement.
Following multiple rounds of open auction, Arif Habib emerged victorious with its final offer of Rs. 135 billion and the withdrawal of Lucky Cement.
Under the deal offered to the buyer, the Arif Habib-led consortium would acquire a 75% stake in PIA, with an option to procure the remaining 25% by paying a 12.5% premium to the government. The consortium is required to inform the government of this intention within 90 days. Under the privatization structure, 92.5% of the proceeds from the sale would be reinvested by the buyer into the airline over the next year, while the remainder would be paid as direct funds to the government.
The successful completion of the privatization of the national carrier was the second such attempt by the incumbent government. An earlier bidding process in October 2024 attracted only one offer—Rs. 10 billion from Blue World City—and was rejected as it did not match the government’s reference price of Rs. 85 billion.
The transaction represents Pakistan’s first major privatization in nearly two decades and meets a key condition of the country’s $7 billion loan program with the International Monetary Fund.
National victory
Addressing the bidding ceremony, Finance Minister Muhammad Aurangzeb said that regardless of who purchased the airline, the ultimate victory was that of Pakistan. He emphasized that all bidders were Pakistani, describing it as a “major and encouraging development” for the country’s investment climate.
“The country’s largest and most seasoned business groups are competing for the national airline, which will be led by experienced Pakistani investors,” he said, adding this would indirectly promote foreign investment by boosting investor confidence and underscoring Pakistan’s commitment to transparent economic reforms.
Separately, Arif Habib Group chief Arif Habib also said the PIA privatization would help boost investment in the country, adding it would also attract foreign investment. He lauded the government for successfully conducting the bidding process in a transparent manner. “We will work hard to make this airline great again,” he vowed.
In a statement, Prime Minister Shehbaz Sharif congratulated the nation on the privatization of the flag carrier. He said the development marked the fulfilment of the government’s promise to privatize state-owned entities. He hoped the privatization would further stabilize the country’s economy and restore investor confidence.
Sharif also lauded Deputy Prime Minister Ishaq Dar and Chief of Army Staff Field Marshal Syed Asim Munir for their role in ensuring the success of the process. He stressed the government was committed to working with the private sector for development and public welfare.