Pakistan's new push to privatize national airline faces headwinds

A Pakistani government move to privatize the crisis-hit country's national flag carrier looks likely to be turbulent, as experts warn the airline makes an unappealing acquisition target. Earlier this month, a body under Pakistan's cabinet used emergency powers to hire financial advisers to plan the privatization of Pakistan International Airlines (PIA) within the next four months. The government made the decision as PIA racks up staggering losses, projected to reach 153b rupees ($550m) in 2023 alone. PIA has made losses of $7.1b since 2012. With the government low on funds and scrambling to put out economic fires, Pakistan is under pressure from the International Monetary Fund to restructure loss-making state-owned enterprises like PIA under a $3b standby loan arrangement. "The government has announced that PIA's legacy liabilities would be parked in a holding company and only the current core assets and current liabilities would be offered for privatization," caretaker Privatization Minister Fawad Hasan Fawad told local media. Fawad said the list of assets to be sold includes PIA's aircraft, routes, landing rights, core engineering and air service agreements. With a 28% share of Pakistan's 17m annual air passenger market, PIA is still the largest single airline in the country. But it is a long way from its heyday in the 1980s, when it offered technical and other assistance that helped establish Emirates, now a giant in the aviation industry. According to the country's Civil Aviation Authority, 40% of domestic air travelers and just 22% of international ones used PIA in the 2021-22 fiscal year. Despite the airline's struggles, some argue the government should still try to salvage it. "PIA is a strategic asset for Pakistan and must not be completely privatized,'' a PIA official said on condition of anonymity. <br/>