DALLAS – The Pakistani government has announced plans to privatize its loss-making flag carrier Pakistan International Airlines (PK). The decision was made on Monday, August 7, by the cabinet’s Economic Coordination Committee (ECC) during a meeting with the country’s Finance Minister.
A new framework set out by the government plans to complete privatization by 2025. The first phase will see the national carrier’s debt removed and incorporated into a new holding firm as a subsidiary company. This will be followed by the sale of shares and a complete restructuring.
The airline has suffered losses for many years. The Pakistani Aviation Minister Khawaja Saad Rafique recently said that without privatization, PK could face losses of up to Rs259bn (US$1bn) by 2030. The carrier’s debt currently stands at Rs742bn (US$2.6bn). In the past year and a half alone, debts have increased by Rs110bn.
Rising fuel costs have also led to the airline’s accounts being frozen, and there have been several incidents where the fuelling of its aircraft has been refused over its inability to pay.
A declaration issued by the ECC said, “After deliberation decided to include Pakistan International Airlines Co. Ltd (PIACL) in the list of active privatization projects of the ongoing privatization programme, following an amendment in the law by the parliament.”
Pakistan International hopes to resume services to the UK, one of its most profitable markets, in the next three months. Flights to the UK and Europe were suspended in July 2020 following a scandal regarding pilots flying on fake licences. This led the European Union Aviation Safety Agency to revoke its authorization to fly to the continent. The suspension of flights has added a further Rs71bn to the carrier’s debts.
PK leased out its lucrative slots at London Heathrow (LHR) for the 2023 summer season to recoup some of these losses. Six slot pairs were surrendered to Vietnam Airlines (VN) between April 1, and October 2023, while ten weekly pairs were granted to Kuwait Airways (KU) between March 26 and October 22, 2023.
Featured Image: Pakistan International Airlines (AP-BMG) Boeing 777-2Q8(ER) (Retrò Livery). Photo: Casey Groulx/Airways.