The last PIA auction is postponed by Pakistan

To reduce losses and increase its foreign exchange reserves in the face of a balance of payments crisis and a shaky $350 billion economy, Islamabad intends to sell Pakistan International Airlines (PIA) and outsource three of its airports.

The International Monetary Fund (IMF), with which Pakistan inked a $7 billion loan arrangement this month, has long advocated for the privatization of the losing state-owned company. The administration declared in July that it would determine the auction date in less than ten days.

Bloomberg said on Monday that Pakistan had postponed the final auction for the country’s state-owned Pakistan International Airlines by two months, to the end of September, in response to bidders’ requests for further details to evaluate the airline.

According to Bloomberg, which cited unnamed sources with knowledge of the situation, bidders are awaiting the airline’s most recent audited financial statements, clarification on any flights that are prohibited to Europe, and lease agreements for aircraft.

The European Aviation Safety Agency (EASA) prohibited PIA from operating on its most profitable routes in Europe and Britain subsequent to a PIA aircraft crash in Karachi in 2020 that resulted in almost 100 fatalities and a pilot licensing scandal. The government informed parliament that the airline’s yearly revenue of roughly 40 billion rupees ($143.73 million) is lost as a result of the ongoing embargo.

Pakistan wants to sell anywhere between 51 percent and 100 percent of the airline, which hasn’t turned a profit in over 20 years. Six bids were chosen by Pakistan in June to compete for the airline, including one led by tycoon Arif Habib and another by the Yunus Brothers Group, one of the country’s biggest conglomerates.

PIA, a well-known airline in its prime in the 1960s and 1970s, has recently suffered from losses of capital, poor management, and operational difficulties. Its financial performance has generally declined as a result of heavy debt, inefficiency, and accusations of corruption.