Pakistan cabinet Approves PIA Privatization Plan, Prepares for Sale

Asma Ahmed - | World

The airline currently holds liabilities totaling $2.8 billion and has incurred accumulated losses amounting to $2.55 billion as of June of the previous year.

Pakistan's interim cabinet endorsed a privatization scheme for the financially struggling Pakistan International Airlines (PIA) on Tuesday, following directives from the country's electoral commission to abstain from finalizing any deals until the plan is reviewed.

Before starting the sale of the airline, which the electoral commission had halted pending review, getting the cabinet's approval is a crucial step.

According to a report from last week, the interim government has continued with the privatization plan for the national carrier despite the electoral commission's directive.

The prime minister's office claimed in a statement that these measures aimed to draw investors to PIA. The loss-making airline's financial difficulties are the focus of the financial restructuring plan that transaction advisor Ernst & Young completed.

The decision to advance privatization efforts despite the upcoming change in administration underscores the economic hurdles that await the new government, compounded by stringent conditions imposed by an International Monetary Fund (IMF) bailout agreement amidst soaring inflation levels in the nation of 241 million people.

Endorsing the recommendation of Pakistan's privatization commission, responsible for divesting all loss-making state-owned enterprises (SOEs), the cabinet greenlit the restructuring plan, which involves dividing PIA into two separate entities.

One entity, termed 'TopCo,' will be offered for sale, while the other will be retained within a holding company, encompassing legacy debt, including substantial loans, creditors' funds, and losses.

According to the statement from the prime minister's office, TopCo will encompass PIA's core operations, such as engineering, ground handling, cargo services, a flight kitchen, and training facilities. Meanwhile, HoldCo will include the precision engineering complex, PIA Investment Ltd., and other ancillary departments and assets.

The decision to privatize PIA follows Pakistan's commitment to the IMF in June as part of a $3 billion bailout agreement. The caretaker cabinet, appointed to oversee the recent elections, was vested with authority by the outgoing parliament to take the necessary actions to fulfill the fiscal targets outlined in the IMF agreement.

As of June last year, PIA's liabilities stood at 785 billion Pakistani rupees ($2.8 billion), with accumulated losses amounting to 713 billion rupees ($2.55 billion). Analysts predict that if the new government decides to renegotiate with the IMF after the current bailout program expires in March, the progress on privatization will be a key factor.

About Author

Asma Ahmed
Asma Ahmed
1564 Total posts

Read Also

The reasons for delays in obtaining Schengen visas

There are several reasons why obtaining Schengen visas can be delayed.

French President Macron Declares snap elections

Emmanuel Macron, president of France, has announced early elections following a crushing defeat for his alliance in the European elections. Macron expressed his plan to dissolve the national assembly and hold new legislative elections.

Bahraini government officially announces Eid Al-Adha 2024 holiday schedule

The dates for the Kingdom of Bahrain's Eid Al Adha have been announced.

Two Tram collision injures many in Siberia's Kemerovo region

n the southwestern Siberian city of Kemerovo, a collision between two trams resulted in injuries to a total of 67 individuals, as reported by the TASS news agency.

Indian embassy cautions youth against accepting job offers on social media

The Indian Embassy in Myanmar has issued a stark warning against the proliferation of fraudulent job schemes targeting unsuspecting individuals, particularly the youth.

An aircraft engine causes the death of a person at Schiphol Airport in Amsterdam

An airplane engine tragically kills a person at Schiphol Airport in Amsterdam.

Germany: Multiple injured in horrific knife assault in distressing incident

A man armed with a knife attacked attendees of a far right-wing information stand affiliated with the Büergerbewegung Pax Europa (BPE) at the central market in Mannheim, Germany, where a violent incident transpired. Around 11:35 a.m., a series of...

The US EB-5 Golden Visa Program provides comprehensive details and features

The United States EB-5 Golden Visa Program offers a comprehensive set of details and features.

Thailand extends visa stays for tourists, students, digital nomads

Thailand's government has approved longer visa stays for tourists, postgraduate students, remote workers, and retirees. This decision is part of a strategic effort to revive the nation's struggling economy, with tourism being a critical...

A famous Indian airline introduces a special seating option for women

IndiGo, a budget airline, recently followed Air India's lead by introducing a new option for solo female travelers. This initiative allows women to select seats adjacent to other female passengers for added comfort and security during their...

Indian police arrest unlicensed hospital boss after six babies die in a fire

The tragic incident at an unlicensed hospital in New Delhi sheds light on the devastating consequences of negligence and a lack of adherence to safety regulations.

The International Court of Justice order Israel to halt Rafah military offensive

Nawaf Salam, president of the International Court of Justice (ICJ), stated on Friday that Israel's response to the humanitarian catastrophe in Gaza has been insufficient since the court's earlier judgment. According to Salam, the ongoing...

The cost of obtaining a Schengen visa is rising again.

Schengen visa fees: The cost of obtaining a Schengen visa is once again declining.

An earthquake measuring 5.3 magnitude shakes Papua New Guinea region

Today, Morobe province in northern Papua New Guinea experienced a 5.3-magnitude earthquake, sending tremors through the region.

Travelers describe how passengers on the plane lose valuable items

Dh70,000 Rolex stolen on flight: Passengers on the airplanes have reported losing important items

The list of destinations that you can travel to for $40 per day

Here is a list of places you can visit for just forty dollars per day.

Canceling dozens of flights causes huge losses

The Civil Aviation Corporation of India has cancelled around 86 domestic and international flights as a result of nearly 300 flight crews calling in sick en masse in the early morning hours of Wednesday.

Canada announces the date of the appearance of King Charles' image on the Canadian dollar

The Bank of Canada announced the date of the appearance of the image of King Charles III on the country's currency, the Canadian dollar, explaining that the image will be placed on the $20 banknote in the year 2027 AD.

Demands to cancel the visas of foreign students in America participating in the protests

Senator Marco Rubio, Republican of Florida, repeated his call to demand the withdrawal of visas for foreign international students in America, against the backdrop of protests and sit-ins demanding a ceasefire in Gaza and the killing of innocent...

Türkiye launches digital travelers visa

Turkey topped the European countries in issuing a “digital travelers” visa, when the Ministry of Culture and Tourism announced the acceptance of applications from qualified applicants.

Globally, the aviation sector is under difficult pressures

A number of reliable sources indicated that the global aviation sector is under widespread pressure, in addition to the crisis of supply chain bottlenecks, which are hindering companies operating in the sector.

Amount of tax on the personal income of foreigners in Canada 2024

The amount of tax that will be levied on foreigners' personal income in 2024.

The types of income taxes imposed on Canadian residents in 2024

Taxes in Canada: What types of income taxes imposed on Canadian residents in 2024?

Canada announces shortening the validity of the LMIA for foreign workers starting next month

The Canadian government has announced the discontinuation of time-limited measures under the Workforce Solutions Roadmap for Canada's Temporary Foreign Worker Program.

International students prefer Canada from the US for ease of post-graduation work permit

International students who wish to work after graduation prefer Canadian immigration legislation over US law. This affects international students' choices. If US immigration policy tightens, the US may lose international students. The study...

Canada imposes huge penalties for temporary work permits for these nationalities

The Government of Canada has announced very strict sanctions on companies and employers who employ Nigerian foreigners and other foreign nationals in temporary jobs.

The new Schengen visa rules allow travel to 29 European countries

With the new Schengen visa requirements, travelers are able to visit 29 different countries in Europe.

Hong Kong and Singapore Ban Indian Brands MDH, Everest Spices

The Centre for Food Safety in Hong Kong has taken action against certain Indian spice products, banning several variants from popular brands MDH and Everest.

Iran Introduces 15-Day Visa-Free Entry for Indian Tourists