The Privatization Commission (PC) of Pakistan on Monday successfully concluded the first phase of the financial agreement (first closing) for the privatization of Pakistan International Airlines Corporation Limited (PIACL).
Management control of the national flag carrier has been handed over to an investor consortium led by Arif Habib Corporation Limited after all prerequisites outlined in the Share Purchase and Subscription Agreement (SPSA) were successfully met.
According to a press release issued by the commission, the successful completion of the first phase of PIACL’s privatization transaction marks a critical milestone in the government's economic reform agenda.
The development was reported by the online portal Geo News.
The press release further noted that this achievement reflects the economic vision announced by Prime Minister Shehbaz Sharif, who has consistently advocated for an expanded role for the private sector as the primary driver of sustainable economic growth, investment, and job creation.
It also underscores the government’s commitment to executing a transparent, competitive, and investor-friendly privatization program.
According to the press release, the consortium committed a total investment of 180 billion Pakistani Rupees (PKR) through a bidding process held on December 23, 2025. Out of this, 55 billion PKR will be paid to the government as the sale proceeds of PIACL, while 125 billion PKR will be injected into PIACL as new capital.
This funding will be utilized for the long-term transformation of the national airline and to restore its past glory. In alignment with this, following the completion of all prerequisites under the first closing, the consortium on Monday paid 10 billion PKR to the government as part of the sale proceeds.
Additionally, it injected 80 billion PKR as new capital to strengthen PIACL's financial foundation. These funds will be used to expand and modernize the aircraft fleet, launch new routes, improve operational efficiency and customer service, and ensure the airline's long-term growth.
Under the terms of the SPSA, the second phase of the financial agreement is scheduled to be completed within 12 months of the first closing, during which the consortium will invest an additional 45 billion PKR into PIACL.
The press release added that the consortium has also expressed interest in purchasing the remaining 25% shares of PIACL by exercising the call option available under the SPSA, for which they will pay an additional 45 billion PKR to the Government of Pakistan.
The Privatization Commission highly praised the support and guidance provided by Deputy Prime Minister Ishaq Dar, Finance Minister Muhammad Aurangzeb, and the Cabinet Committee on Privatization.
Since the signing of the SPSA on January 29, 2026, the Privatization Commission and relevant government bodies, including the Ministry of Defence, have successfully fulfilled all complex prerequisites under the agreement.
These included approvals from domestic and international regulatory authorities, consents from aircraft lessors and commercial partners, reforms in civil aviation policy, corporate approvals, restructuring of the tax framework related to legacy liabilities, aircraft financing arrangements, governance changes, tax matters, airport infrastructure arrangements, and necessary measures taken by the investor consortium to ensure transaction security.
The press release emphasized that despite these prerequisites being met within a very limited timeframe, the airline's normal operations were maintained throughout the process.
Crucial commercial relationships and aviation certifications were preserved, employee interests were protected, and passenger services remained uninterrupted.
Speaking on the occasion, the Prime Minister’s Advisor on Privatization, Muhammad Ali, stated that this transaction demonstrates Pakistan's capability to successfully execute complex strategic transactions through a transparent, fair, competitive, and professionally managed process.
He noted that this deepens the government's commitment to economic reforms, fiscal discipline, and greater private sector participation, while boosting the confidence of both domestic and international investors.
He further added that the government remains committed to protecting the interests of employees, passengers, and consumers, alongside ensuring a smooth transition of ownership and uninterrupted operations of the airline. He maintained that all applicable civil aviation laws and regulatory oversight will continue as before.
The Privatization Commission also stated that the contributions of the Federal Cabinet, the Commission’s Board of Directors, various ministries—particularly the Ministry of Defence and the Ministry of Finance—other government institutions, local regulatory authorities, and the financial advisory consortium led by EY Consulting LLC Dubai, played a vital role in the successful completion of this first phase.
Meanwhile, in a post on the social media platform X, Prime Minister Shehbaz Sharif welcomed the successful completion of PIACL's first financial closing and congratulated the nation on this historic milestone in Pakistan's privatization history.
He wrote, "The successful completion of the first phase of the PIA privatization transaction is indeed a deeply satisfying moment for my government and the people of Pakistan."
The Prime Minister lauded the role and hard work of Deputy Prime Minister Ishaq Dar in achieving this success. He also extended his appreciation to Field Marshal Asim Munir and his dedicated team for this collaborative effort. Furthermore, he highly praised Defence Minister Khawaja Asif, Finance Minister Muhammad Aurangzeb, Advisor on Privatization Muhammad Ali, and the members of the Cabinet Committee on Privatization and the Privatization Commission, noting that the transaction was successfully concluded owing to their collective efforts.
