Round 1: Arif Habib leading, Lucky Consortium penultimate, Air Blue stands third till now
RACE STARTS: OPEN-BIDDING UNDERWAY FOR PIA PRIVATIZATION
Arif Habib Ltd: 115 billion
LUCKY CEMENT: 101.5 billion
Air Blue: 26.5 billion
By Aneel Ahmed Usmani
ISLAMABAD: The second open-bidding ceremony for the privatization of Pakistan International Airlines (PIA) is currently underway in Islamabad, with a brief half-hour break during the proceedings. Three major contenders are competing for a majority stake in the national flag carrier.
During the initial round of bidding, Arif Habib Corporation Limited has emerged as the frontrunner with an offer of Rs115 billion. Following closely is Lucky Cement Limited with a bid of Rs101.5 billion, while Air Blue currently trails with Rs26.5 billion.
The competitive bidding marks a significant step in Pakistan’s efforts to privatize its national airline, attracting major players from diverse sectors and generating heightened public and media attention.
The first consortium is led by Lucky Cement Limited and includes power producer Hub Power Holdings Limited, Kohat Cement Company Limited (KOHC), and investment firm Metro Ventures. The second consortium is spearheaded by Arif Habib Corporation Limited, with partners Fatima Fertiliser Company Limited, private school network City Schools, and real estate firm Lake City Holdings Limited. The third bidder is private airline Air Blue (Private) Ltd.
This auction represents Pakistan’s second televised attempt to sell PIA after last year’s failed process, which drew only a single bid far below the government’s reference price, stalling what would have been the country’s first major privatization in nearly two decades.
The bids are being submitted in a public ceremony broadcast live on state television. Representatives of the bidding groups deposited sealed offers into a transparent box, ensuring transparency throughout the process. The bidding for the majority stake will occur in two phases, with a second open-bidding session scheduled later today.
Prime Minister Shehbaz Sharif lauded the process for its transparency and urged cabinet members to attend the ceremony. Fauji Fertiliser Company Ltd, previously seen as a leading contender for the 75% stake, formally withdrew from the bidding last week.
Under the privatization structure, 92.5% of the amount paid for the 75% stake will be invested in PIA, with the remaining 7.5% going to the government. Bidders may also have the option to acquire the remaining 25% stake retained by the state. Payment terms stipulate that two-thirds of the bid must be paid within 90 days, with the remainder due within 12 months.
The government has guaranteed 12 months of job security for PIA employees, while pension liabilities, medical benefits, and other post-retirement perks will be managed by the holding company. The airline currently operates 78 destinations worldwide and holds around 170 landing slots.
PIA’s financial outlook has improved significantly since last year. Islamabad has absorbed most of its legacy debt, the airline posted its first pre-tax profit in two decades, and international regulators, including the UK and EU, have lifted a five-year ban, reopening lucrative routes. Analysts say this could materially increase PIA’s valuation compared to the failed auction last year.
The sale of PIA forms part of Pakistan’s broader privatization agenda under the IMF bailout, which also targets stakes in state-owned banks, power distribution companies, and other loss-making enterprises to reduce fiscal drain and restore investor confidence.
