Tag: PIA

Pakistan International Airlines Corporation Ltd (PIAC) has caused the national exchequer to take a hit once again. According to reports, the federal government’s attempt to privatise the national carrier resulted in a colossal outflow of $4.3 million to a financial advisory firm.

As per reports, Privatisation Secretary Jawad Paul notified the National Assembly’s Standing Committee on Privatisation regarding the reason and details of the payment. Ernst & Young, a financial advising firm, was expecting to receive a total amount of $6.8 million.

However, authorities only disbursed 63 percent of the total agreed-upon payment amount, retaining $2.5 million until the advisory firm oversees the completion of transactions related to the privatisation of PIAC.

Jawad Paul told committee members about the Privatisation Commission’s efforts to successfully complete the valuation of properties that PIACL would retain. Moreover, he revealed that new valuations were used in the company’s financial statements – dated until the end of April 2024.

According to credible reports, committee members asked Jawad to let them know about the details of properties which have already been passed on to holding companies. The committee also engaged in discussions surrounding the losses the national exchequer incurred while unsuccessfully attempting to privatise the airline.

The privatisation attempt was nationally televised and did not even manage to secure the minimum set price of 85 billion rupees. The national carrier received an abysmally low bid of 10 billion rupees from a real estate developer.

However, new developments might allow PIA’s perceived value to rise in the minds of potential investors. After four and a half years, the airline has regained the rights to fly to Europe and now operates flights to Paris.

The moratorium on PIA’s services to Europe came about as a direct consequence of a post-crash speech by then-minister Ghulam Sarwar, who had claimed without any evidence that 40 percent of PIA’s pilots were flying with fraudulent licenses. Sarwar’s speech detrimentally impacted the airline’s credibility, and the airline lost its goodwill with customers, which it had earned over the years. 

Nevertheless, after PIA flight 8303 crashed in Karachi, the company lost the right to fly to various high-traffic destinations such as the United States, Canada, European Union (EU) and United Kingdom (UK).

Moreover, PIA is reportedly set to receive the greenlight to resume flight operations, the official decision is still in the pipeline and will become official once UK regulators clear PIA’s status. 

If approved to fly to the UK, PIA’s chances of getting privatised might rise significantly. This is because bidders previously did not see the airline making significant revenues. However, Pakistan-UK routes are extremely lucrative given the size of the Pakistani diaspora residing within the UK. This could boost the profitability of the company, making it seem more attractive to potential buyers.

Pakistan International Airlines (PIA) has again come into the spotlight; however, this time, the national carrier has nothing to do with the developments in question. As per reports, the mayor of New York City (NYC) decided to terminate a $220 million lease with Pakistani authorities.

The lease agreement was for the Roosevelt Hotel in NYC, which is owned by PIA. However, because of rising domestic anti-asylum sentiments, the mayor binned the deal to avoid criticisms of wasting taxpayer funds to support asylum seekers.

This spells bad news for PIA, which will now have to find thousands of guests for the soon-to-be vacant Roosevelt Hotel. The hotel ceased operations in 2020 after sustaining large financial losses during the COVID-19 pandemic. It was only able to remain financially buoyant because Texas’ conservative governor reportedly expelled asylum seekers from his state to other liberal states around 2023.

According to reports, the hotel has a staggering 1025 rooms, which were housing over ten thousand immigrants at an estimated cost of $200 per night. At the time the lease was inked, it appeared as a mutually beneficial deal for both PIA and NYC.

However, a fall in the influx of migrants has been witnessed since 2023, when a colossal 4,000 immigrants were coming into the city every week. This number has now fallen to just 350 immigrants per week. Reports reveal that PIA’s Roosevelt Hotel was a major immigrant processing centre catering to and housing approximately three-quarters of immigrants coming into NYC.

With migration levels under control and US President Donald Trump’s hardline stance against immigrants, it did not seem like a beneficial deal to continue the lease agreement. Eric Adams, the mayor of NYC, had been facing rising criticisms from both the right wing and the government. The pressure resulted in convincing him to shut the facility down, causing PIA to lose its sole client for the hotel.

The lease had been signed with the NYC administration for an annual amount of approximately $73 million, and it was agreed that the deal would last for three years, allowing for PIA to rake in a total of $220 million. With the hotel out of business, many wonder how this will affect the privatisation prospects of the airline.

Since the national carrier has lost a steady source of revenue, its profitability figures may take a hit, causing it to not seem as attractive as before. NYC administration’s decision could prove to be costly for PIA.

After a nearly five-year ban, the UK aviation authority may lift its restrictions on Pakistan International Airlines (PIA), allowing direct flights to UK airports. As per reports, officials from PIA have already started planning the reopening of the national carriers’ Islamabad-Manchester route from March 28.

While PIA is reportedly set to receive the greenlight to resume flight operations, the official decision is still in the pipeline and will become official once UK regulators clear PIA’s status. In early January 2025, PIA resumed operations in Europe after flight PK-749 took off from Islamabad bound for Paris, carrying 330 passengers and 14 crew members.

The moratorium on PIA’s services to Europe came about as a direct consequence of a post-crash speech by then-minister Ghulam Sarwar, who had claimed without any evidence that 40 percent of PIA’s pilots were flying with fraudulent licenses. Mr. Sarwar’s speech detrimentally impacted the airline’s credibility, and the airline lost its goodwill with customers, which it had earned over the years.

Nevertheless, after PIA flight 8303 crashed in Karachi, the company lost the right to fly to various high-traffic destinations such as the United States, Canada, European Union (EU) and notably, the UK. However, PIA seems to be coming alive again as countries are beginning to trust PIA’s safety measures once again.

As per reports, a transport safety review board from the UK is set to discuss PIA’s aviation status by the middle of March. PIA, after implementing various reforms to update its security measures, strongly believes that the board will remove the suspension that has kept PIA’s aircraft off of British airports since 2020.

The national carrier is reportedly ready to operate flights as soon as approval is granted. According to a PIA spokesperson, airline executives are waiting for an official notification from the UK’s Department of Transport.

If approved to fly to the UK, PIA’s chances of getting privatized might rise significantly. This is because bidders previously did not see the airline making significant revenues. However, Pakistan-UK routes are extremely lucrative given the size of the Pakistani diaspora residing within the UK. This could boost the profitability of the company, making it seem more attractive to potential buyers.

Furthermore, if PIA gets the green light, Manchester will not be the only city the airline will fly to. According to reports, while the national carrier will fly to Manchester during the initial phase, it plans to quickly resume operating flights to London and Birmingham.

To prepare for the potential flights, airline officials have reportedly issued quotations for catering, crew accommodation, and ground handling.

Pakistan International Airlines’ (PIA) efforts to comply with safety standards have not yet convinced the United Kingdom (UK) to open its doors to the airline. As such, PIA has reportedly contacted Airport Coordination Limited (ACL) to lease out two of its slots which it still holds at London Heathrow.

According to reports, the slots will pass on to Saudia, formerly known as Saudi Arabian Airlines, which will run flight operations using PIA’s slots during Summer 2025. The decision surrounding PIA’s eligibility to operate flights to the UK rests with the UK’s Department for Transport and Civil Aviation Authority.

The aforementioned entity carried out an examination of Pakistan’s aviation security protocols and is expected to disclose its decision regarding PIA’s eligibility by the middle of March 2025.

Pakistan’s consideration to lease out these slots indicates a lack of confidence in regaining flying rights to the UK. This is because according to the time frame, PIA could operate flights a month before it actually leases the slots over to Saudia.

Currently, PIA is leasing out its slots to obtain monetary gains as it can’t fly to and from the airport during those slots. Various airlines such as Turkish Airlines, Saudia and Vietnam Airlines have been renting the slots from PIA to expand the scope of their own operations in the UK market.

PIA has been relying on this tactic to keep landing rights to Heathrow airport while it waits for the relevant regulatory authorities to give it the green light for the resumption of flight operations.

After PIA flight 8303 crashed in Karachi, the company lost the rights to fly to various high traffic destinations such as the UK, United States (USA), Canada and the European Union (EU). Aviation Minister Khawaja Muhammad Asif recently conceded that the national carrier had lost “hundreds of billions” of rupees over the past four and a half years because of these profitable routes remaining closed off to Pakistani airlines.

The moratorium in PIA’s services to Europe came about as a direct consequence of a post-crash speech by then-minister Ghulam Sarwar, who had claimed without any evidence that a staggering 40 percent of PIA’s pilots were flying with fraudulent licenses. Mr. Sarwar’s speech detrimentally impacted the airlines credibility and the airline lost its goodwill with customers which it had earned over the years.

The Pakistani national carrier was recently able to comply with the safety standards of the European Union Aviation Safety Standards (EUASA) after four grueling years. However, the airline is still not allowed to operate flights to the UK and USA.

Not all hope is lost for PIA though as reports have revealed that the airline intends to take back its leased slots for its own flights if restrictions are removed.

Islamabad International Airport (IIAP) saw the departure of the first flight of the national carrier to Europe after four and half years. Pakistan International Airlines’ (PIA) flight PK-749 took off on Friday Afternoon carrying 330 passengers and 14 crew members, as per Express Tribune.

The moratorium in PIA’s services to Europe came about as a direct consequence of a post-crash speech by then-minister Ghulam Sarwar, who had claimed without any evidence that 40 percent of PIA’s pilots were flying with fraudulent licenses. Mr. Sarwar’s speech detrimentally impacted the airlines credibility and the airline lost its goodwill with customers which it had earned over the years.

Nevertheless, after PIA flight 8303 crashed in Karachi, the company lost the rights to fly to various high traffic destinations such as the United States, Canada and the European Union (EU). Aviation Minister Khawaja Muhammad Asif conceded that the national carrier had lost ‘hundreds of billions’ of rupees over the four and a half years when profitable routes remained closed off to Pakistani airlines.

The inaugural flight ceremony was attended by a multitude of high profile senior officials such as the PIA CEO Air Vice Marshal Amir Hayat, Khawaja Asif, director generals of both the Civil Aviation and Pakistan Airport Authority.

Mr. Asif commended the hard work PIA officials have displayed for Europe to reopen its airports to Pakistan. He also expressed great dissatisfaction with his predecessor, the former aviation minister, whose statements Mr. Asif believes negatively impacted the aviation sector.

Mr. Asif also lamented the national carrier’s huge debt burden which stands at a staggering 800 billion rupees which the airline accrued while lucrative routes remained closed.

With the first flight to Paris today serving as the gateway to future operations in the European Union and neighboring countries, PIA is on track to regain some of its former glory. Mr. Asif even announced that PIA will begin flights to the United Kingdom very soon.

The Minister’s aspirations for additional routes aside, PIA intends to operate two flights between Islamabad and Paris a week. The first two flights are already fully booked and PIA is indicating that demand is not expected to slow down.

This is because passengers having to fly to and from Pakistan and France faced excessive costs in the absence of PIA’s flights. However, with an increase in the supply of airlines offering to fly between the two destinations, airfares are expected to drop further.

With PIA in control of lucrative routes and more routes to potentially open up, such as the United Kingdom, the airline could seem more attractive to investors. Speculators are expecting that PIA’s privatization could pick up pace with the company set to generate healthy cash flows in the upcoming periods.

Pakistan International Airlines (PIA) is planning to improve its fleet by adding eight aircraft in the coming year as per the Chief Executive Officer (CEO) of the national carrier. The upgrade plans have been formulated as PIA managed to regain lucrative routes to Europe after losing them after flight 8303 crashed in Karachi.

PIA’s CEO Khurram Mushtaq reported that the Boeing 777 aircraft was going to be used to fly the longer routes.

He disclosed in a briefing that PIA’s first flight would be to Paris on January 10. According to Mr. Mushtaq, PIA will be operating two flights a week to Paris where Air France will facilitate any passengers that are travelling to European countries other than France.

As per Dawn news, aside from shedding light on the procedure of reopening routes to Europe, Mr. Mushtaq also addressed complaints about the food served on PIA flights. He said that food quality has improved to satisfy customers.

Mr. Mushtaq also announced that daily flights from Karachi to Sukkur will be operational despite the lack of passengers on domestic flights due to the vast and impressive motorway network in Pakistan.

Prior to the opening of the European routes, the runways of both Quetta and Lahore airport underwent upgrades. As per the DG of Pakistan Airports Authority (PAA), this included solving the longstanding issues of parking and transportation that had plagued Quetta airport.

The senate committee, which had received both the CEO of PIA and the DG of PAA, was also briefed on initiatives that were being taken to develop airports further.

The members of the senate however, were not pleased with the progress of the ongoing projects and initiatives. This resulted in the creation of a sub-committee to monitor and evaluate the progress of airport development initiatives.

Following the briefing, a press release reiterated the Senate’s commitment to tackling any hurdles in the development of airports with complete accountability and transparency.

The measures being taken by the Senate, PIA and CAA are an attempt to revitalize PIA after years of mismanagement has left the airline relying on government funds to stay afloat. 

Attempts have been made to privatize PIA in the recent past but these efforts did not yield positive results as no notable bids were made to purchase the national carrier.

However, with European routes open and new planes entering the fleet, acquiring PIA is an attractive prospect for investors. Privatization minister, Abdul Aleem Khan has been making efforts to fast-track matters pertaining to the sale of government owned entities. It will be interesting to see if Islamabad will be willing to keep PIA or privatize it as it starts to take off once again.

The Privatisation Commission (PC) Board on Wednesday rejected the latest bid for the national carrier, Pakistan International Airlines (PIA), presenting new proposals for the airline’s privatisation.

New proposals will now be forwarded to the cabinet committee and the federal cabinet for approval.

The Blue World City consortium, the only bidder, had placed a bid of Rs10bn against the minimum price of Rs85.03bn. The Shehbaz-led government had pre-qualified six groups in June, but only the real estate development company participated in the final bidding process.

The decision to reject the lowest bid and new proposals came during a meeting chaired by Privatisation Minister Abdul Aleem Khan. Several privatisation initiatives were reviewed and key recommendations were approved.

The minister stressed that all privatisation efforts, including those for PIA, must adhere to legal protocols while prioritising the national interest.

“The final decision on the privatisation of institutions like PIA rests with the cabinet committee and steps must be taken to enhance future bidding processes, Khan maintained.

The minister also directed officials to expedite the privatisation of PIA and other public entities and emphasised the importance of learning from the current PIA privatisation process to improve future efforts.

There are some media reports that the federal government is also working on a new plan for privatisation, which involves the sell-off of the cash-strapped national carrier to either Qatar or Abu Dhabi under a government-to-government (G2G) agreement.

It is worth mentioning that the Khyber-Pakhtunkhwa (KP) government and local business community have also shown interest in buying the PIA.

Spectators watched as the televised auction of the flag carrier, Pakistan International Airlines (PIA), failed horribly. The government seemed interested in selling PIA for the right price but did not approve the sale when the sole bid was off by 88.2 per cent of the original value.

The reason for only one bid is the government’s condition for the purchasing entity to inject over half a billion dollars into PIA to modernise the fleet. Five business owners out of the six companies selected for the auction process decided to opt out due to this additional investment that they would have to finance after the purchase of PIA itself.

The government was expecting to receive a total of $305 million but managed to get only a reality check. In hindsight, the goal of privatising the national carrier to companies via auction was a bad idea.

If lawmakers in Islamabad aim to make the sale, it will have to explore other avenues.

The auction process could be expanded to include more local businesses and international players, too. As it stands, this seems viable as Saudi Arabia, UAE, and Qatar have all expressed great interest in purchasing PIA in the recent past.

Additionally, these investors in the Gulf also have the financial capability to undertake the massive $700 million fleet modernisation plan once they acquire PIA. This would be a good way for Pakistan to secure FDI (Foreign direct investment) inflows of over one billion dollars.

Alternatively, the government could opt for a simple solution. This could be issuing more shares to be traded on the PSX (Pakistan Stock Exchange). However, this will spell bad news for investors who already have their money parked in the publicly traded PIA holding company. This is because the value of their shares will be reduced due to the dilution of ownership that will occur post-share issuance.

In simple words, the creation of new shares will cause investors to lose out due to more overall shares being traded on the PSX. This is especially true if we consider the fact that Islamabad is currently interested in selling around 60 per cent of PIA.

In this approach, shareholders, in collaboration with the government, could use the funds raised by the sale of shares to modernise the fleet without extensive international investments.

However, as it stands, PIA is a loss-making institution.

With last year’s loss of 75 billion rupees, PIA’s liabilities grew to a staggering 825 billion rupees. If the government retains a majority of the share while raising capital by issuing shares, investors could actually lose out instead. This is because civil servants can simply not run a company with the same efficiency businessmen can.

If investors believe that the government will not commit to running PIA as a profit-maximising business rather than the national carrier, they may not put their money into it to begin with.

The question remains: Which entity will purchase PIA from the government? The answer, while currently uncertain, will be sought by suits in Islamabad’s boardrooms.