Why is Pakistan International Airlines' privatization called a 'strategic mistake'?

The recent Pakistan International Airlines privatization has drawn strong political opposition. Jamaat-i-Islami (JI) chief Hafiz Naeem ur Rehman rejected the sale. He called the national flag carrier a PIA strategic asset that should not have been sold. The government sold a 75% stake to a consortium led by the Arif Habib Corporation consortium for Rs135 billion sale price in late December 2025.

Political and Financial Context

Hafiz Naeem ur Rehman spoke at a press conference in Karachi. He argued that selling a state-owned enterprise due to government failure is shameful. He held successive governments responsible for years of government mismanagement. This included the PML-N, PPP, PML-Q, and PTI parties. He stated that those responsible for the airline's ruin should be held accountable first.

Questioning the Sale Price

The JI chief claimed the Rs135 billion sale price was misleading. He highlighted that over 90% of this amount is for reinvestment into the airline. Only about Rs10 billion will go into the national exchequer. He questioned the valuation, noting that a single second-hand Airbus A320 aircraft costs roughly Rs10 billion.

He also pointed out that PIA holds 78 landing rights globally. The airline's total assets are reportedly valued between Rs150 billion and Rs190 billion. The value of these assets and the airline's goodwill far exceed the final sale price, he argued.

Airline Restructuring and Profitability

The government had split PIA into two companies before the sale. The goal was to make the airline more attractive to investors. Most legacy debt and non-core assets were shifted to PIA Holdings.

The operational entity of the airline showed a positive financial trend. It reported a pre-tax profit of Rs11.5 billion for the first half of 2025. This was the first half-year profit in nearly two decades. The turnaround was largely due to the government assuming a large portion of the airline's massive debt.

The Future of the National Flag Carrier

The government defended the sale as crucial to Pakistan economic reform. It was a key condition of the country's $7 billion IMF bailout program. Officials stressed the transparency of the live-televised auction. The new owners are expected to take operational control in early 2026. They are required to invest significant capital into the airline.

Critics like Hafiz Naeem, however, see the transaction as handing over a profitable, strategic asset. He questioned the role of entities like the Fauji Foundation in the bidding process. This raised concerns about the true nature of the privatization controversy. The debate highlights the deep division over the fate of the national flag carrier. The new owners face the challenge of airline restructuring while navigating this political scrutiny. For more commercial aviation news and analysis, visit our site. The government will retain a 25% minority stake in the airline.