PIA Set to Complete Transfer to New Owners by End of June 2026
All Regulatory Approvals Cleared as Pakistan Moves Ahead with Major Privatisation Plans
ISLAMABAD: Pakistan International Airlines (PIA) is expected to officially come under the control of its new owners before the end of June 2026, marking the completion of one of Pakistan’s most significant privatisation deals in recent years.
According to government officials, all required local and international regulatory approvals have now been secured, clearing the final hurdles that had delayed the handover process after the successful bidding concluded in December 2025.
Prime Minister’s Adviser on Privatisation, Muhammad Ali, confirmed that the transfer process is in its final stage and will be completed within the current month. He explained that several international aviation permissions and operating rights had to be transferred to the new management, a process that required approval from multiple regulatory authorities across different countries.
New Owners Already Involved in Key Decisions
Although PIA is still formally operating under government oversight, the incoming owners are already participating in major operational and financial decisions under the terms of the sale agreement. The airline’s legal restructuring into a public limited company has also been completed, paving the way for the final transition.
IMF Approves Tax Relief Package for PIA
To facilitate the privatisation process, the International Monetary Fund (IMF) has approved special tax incentives for PIA. These incentives include exemptions on aircraft purchases, leases, equipment, and related accessories for a period of 15 years. The government has incorporated these provisions into the Finance Bill for the fiscal year 2026-27.
However, these tax concessions currently apply only to PIA. Officials acknowledged that other airlines operating in Pakistan do not enjoy similar benefits at this stage. The government has indicated that discussions with the IMF may continue in an effort to ensure fair treatment across the aviation sector.
The issue has also drawn criticism from lawmakers, who argue that all airlines should operate under equal market conditions. Concerns were raised during parliamentary discussions on the federal budget regarding the preferential treatment granted to the national carrier.
Islamabad Airport Privatisation to Begin in FY27
The government is also moving forward with plans to privatise Islamabad International Airport during the 2026-27 fiscal year. The Asian Development Bank (ADB) has been selected as the transaction adviser and is expected to formally assume the role after final approval from the Cabinet Committee on Privatisation.
Meanwhile, authorities are preparing to launch the process of hiring financial advisers for the outsourcing of Karachi and Lahore international airports. Officials estimate that each airport could attract more than $500 million in fresh investment once the process is completed.
Five Power Distribution Companies Also on the Privatisation List
Beyond aviation, the government has identified five power distribution companies (Discos) for privatisation or long-term concession agreements during FY27.
The proposed timeline includes the sale of Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO), and Islamabad Electric Supply Company (IESCO) later this year. Long-term concession arrangements are also planned for Hyderabad and Sukkur distribution companies.
In addition, the government aims to complete transactions involving Zarai Taraqiati Bank Limited (ZTBL), House Building Finance Corporation (HBFC), and Islamabad International Airport before June 2027.
Ownership Structure of the New PIA
The successful bid for PIA was secured by a consortium led by Arif Habib Group, which acquired a 75 percent stake for Rs135 billion in December 2025. A significant portion of the investment is expected to be used for modernising and expanding the airline.
Fauji Fertiliser Company, which initially participated as a competing bidder, later joined the consortium and acquired an additional 25 percent shareholding.
Under the final ownership structure, Fatima Fertiliser holds a 34.1 percent stake, while Fauji Fertiliser owns 33.9 percent. Lake City controls 16 percent, and the remaining 16 percent is jointly held by City Schools Group and AKD Group.
With the completion of the transfer process, the consortium will assume full control of Pakistan’s national flag carrier, opening a new chapter in the airline’s history.
Conclusion
The transfer of PIA to private ownership represents a major milestone in Pakistan’s broader economic reform and privatisation agenda. Government officials hope that private-sector management, fresh investment, and operational reforms will help restore the airline’s competitiveness and improve service standards in the years ahead.
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