Arif Habib Group Plans Major Expansion of PIA Fleet

Pakistan International Airlines (PIA) is expected to grow significantly after its privatization, as the Arif Habib Group has announced plans to expand the airline’s fleet to 64 aircraft in phases.

A consortium led by Arif Habib Corporation Limited has won the bid to acquire a 75 percent stake in PIA for Rs. 135 billion. The deal was finalized during a government auction held as part of Pakistan’s privatization program.

During the bidding process, Arif Habib increased his offer from Rs. 115 billion to Rs. 135 billion after a rival group led by Lucky Cement Limited raised its bid to Rs. 134 billion.

Speaking to a private TV channel, Arif Habib said the consortium has 90 days to complete the purchase and is also interested in buying the remaining 25 percent stake to gain full control of the airline. He confirmed that Fauji Fertiliser Company Limited is also part of the consortium.

According to Habib, the government will receive Rs. 10 billion from the sale of the 75 percent stake, while the remaining 25 percent stake is valued at Rs. 45 billion. He added that PIA’s fleet will first be expanded to 38 aircraft and later increased to 64 aircraft.

PIA currently has liabilities of around Rs. 190 billion, while its assets are estimated at about Rs. 180 billion.

Adviser to the Prime Minister on Privatization, Muhammad Ali, said the new owners are expected to start running the airline by April, once regulatory approvals are completed. He added that final approvals from the Privatization Commission and the federal cabinet are expected within days.

The contract is likely to be signed within two weeks, followed by financial closing within 90 days to meet legal and regulatory requirements.

Muhammad Ali explained that the deal is designed to bring fresh investment into PIA, not just change ownership. The agreement includes safeguards, such as advance payments, allowing the government to approach the second-highest bidder if the deal does not go through.

On employee matters, he said the new owners must retain all staff for at least 12 months under existing terms. He also noted that PIA’s workforce has already been reduced in recent years.

The privatization of PIA is being closely watched by the International Monetary Fund, which has urged Pakistan to reduce losses at state-owned companies. Muhammad Ali said successfully completing this deal would strengthen Pakistan’s reform efforts and encourage further privatizations.