Following what’s being dubbed “Operation Sindoor” in India, Pakistan’s economic situation has reportedly taken a severe turn for the worse, with a stark example now clearly visible. One of Pakistan’s major companies, the national flag carrier Pakistan International Airlines (PIA), is on the verge of being privatized, with the government actively seeking bids from potential investors. The initial deadline for submitting expressions of interest (EOIs) was June 3rd, but this has now been extended to June 19th. This extension of 15 days from the original deadline aims to facilitate broader participation in one of the country’s most significant disinvestment initiatives in recent times. The government plans to offer a controlling stake ranging from 51% to 100% in PIACL, along with full management control. A senior official from the Privatization Commission confirmed the extension, stating that all other terms and conditions for the acquisition remain unchanged. The extension was reportedly granted due to Eid ul Adha.

This move comes as the Pakistani government accelerates its plan to privatize the loss-making national carrier, driven by a desperate need to reduce the fiscal deficit, reform inefficient state-owned enterprises, and attract much-needed foreign investment. This privatization process is a crucial part of the reforms agreed upon with the International Monetary Fund (IMF) under the Extended Fund Facility (EFF). To make the deal more appealing, Islamabad has introduced new incentives, including GST exemption on new aircraft and the removal of PIA’s loans from its balance sheet. These changes aim to present a “pure-zero balance sheet” to potential buyers. A revised price benchmark for the deal is also expected to be set soon. The current plan is significantly simpler and cleaner than a previous unsuccessful attempt, which offered 60% shares with an optional 15% top-up. At that time, PIA’s negative equity of PKR 45 billion and 18% GST on aircraft were major hurdles. EY Consulting LLC is advising the Privatization Commission on the sale, and the government hopes to complete the process within the current calendar year.