Govt Speeds Up PIA Sale: Framework Finalized to Offload Airline Losses

The federal government has accelerated the privatization process of Pakistan International Airlines (PIA) and finalized a framework for distributing the airline’s assets and liabilities, high-level sources told ProPakistani. The new PIA management will inherit assets valued at Rs. 146 billion and liabilities amounting to Rs. 202 billion. The new PIA entity will commence operations with a loss of Rs. 55.7 billion. The assets and liabilities of the national airline will be divided between PIA and a holding company, with the total value of PIA’s assets estimated at Rs. 171.43 billion. Following privatization, Rs. 146.57 billion worth of assets will be transferred to the new PIA management, while Rs. 24.86 billion will remain with the holding company. Out of PIA’s total loss of Rs. 830 billion, Rs. 202 billion will be attributed to the new PIA, while the remaining Rs. 628 billion will be transferred to the holding company. The privatization plan includes a division of PIA operations into core and non-core components, affecting the distribution of assets and liabilities. The new PIA management will oversee Rs. 92.62 billion worth of aircraft, technical equipment, operational offices, and other properties. They will also manage long-term deposits worth Rs. 6 billion, trade debits and advance deposits totaling Rs. 22.35 billion, and other receivables amounting to Rs. 16.83 billion. In terms of liabilities, the new company will inherit Rs. 15.63 billion in long-term financing, Rs. 30 billion for aircraft leases, Rs. 27.26 billion for employee salaries, and Rs. 121 billion in trade and other liabilities. The holding company will absorb Rs. 628 billion in losses and liabilities, including long-term investments in PIA subsidiaries like Sky Room Pvt Ltd, Midway House Pvt Ltd, PTDC Duty-Free Shops Ltd, and Roosevelt and other hotels. Additionally, Rs. 444 billion in loans from domestic and foreign institutions, along with the corresponding interest, will be transferred to the holding company. This includes Rs. 161 billion owed to the government and Rs. 267 billion to commercial banks. Trade and other liabilities include Rs. 120.9 billion owed to Civil Aviation, Rs. 20 billion to PSO, and over Rs. 2.5 billion to National Insurance Company, all of which will be categorized as non-core and transferred to the holding company.