Why is Pakistan privatizing PIA? Pakistan’s federal government decided to privatize the national airline, which was mired in financial turmoil for some years.
Why is Pakistan privatizing PIA?
The Cabinet Committee on Privatisation, chaired by Finance Minister Ishaq Dar, made the decision to privatize loss-making Pakistan International Airlines.
The committee “after deliberation decided to include Pakistan International Airlines Co. Ltd. in the list of active privatization projects of the ongoing privatization programme, following an amendment in the law by the Parliament,” according to a finance ministry statement on Monday.
Participants in the meeting also agreed to hire a financial counsel to handle the transaction of the Roosevelt Hotel in New York, a PIA Investment Limited asset.
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The plan to privatize PIA coincides with initiatives to decrease national exchequer losses through several state-owned firms; the national carrier is also scheduled to begin flights to the United Kingdom and other European destinations by October.
Over safety concerns, the European Union Aviation Safety Agency (EASA) halted Pakistan International Airlines (PIA) aircraft operations in Europe in 2020.
After failing to comply with the proposed corrective action plans (CAPs), EASA suspended PIA’s Third Country Operator (TCO) Authorisation.
During meetings in June and September 2019, at least six findings were discussed with PIA authorities, with five of the action plans implemented and one other concerning part of a Safety Management System not implemented.
Previously, the government chose to outsource operations at the country’s three international airports, which are located in Lahore, Karachi, and Islamabad.
According to Pakistan Aviation Minister Khawaja Saad Rafique, the Islamabad International Airport will be outsourced for 15 years.
The finance minister has already convened many meetings of the committee constituted to engage foreign operators for outsourcing, and if the plans are carried out, Karachi and Lahore international airports will be outsourced as well.
Three airports have been outsourced as part of a public-private partnership to engage private investors/airport operators in a competitive and transparent process.
