Pakistan plans to sell off PIA before election, says minister

ISLAMABAD, Jan 16 (NDTV): Pakistan will try to privatise its national airline before general elections due this year, privatisation minister Daniyal Aziz said, as the ruling party seeks to restart sales of state-run businesses.

Pakistan International Airlines (PIA), haemorrhaging money and losing market share to Gulf-based rivals such as Etihad and Emirates, has been hit by management turmoil in recent years and a 2016 plane crash that led to 47 deaths.

The privatisation of loss-making entities that were draining the exchequer was a key priority for the Pakistan Muslim League-Nawaz (PML-N) party when it swept to power in 2013.

PIA was among 68 state-owned companies earmaked for privatisation in return for a $6.7 billion International Monetary Fund package that helped Pakistan to stave off a default in 2013.

Despite some initial success, the process stalled in 2016 after staff protests caused havoc with PIA operations and the government passed a law that effectively made it impossible to privatise the airline.

But Aziz, chairman of the Privatisation Commission, told Reuters that new plans have been drawn up to sell off PIA and he would take the proposals to the cabinet committee on privatisation, chaired by Prime Minister Shahid Khaqan Abbasi.

"Next step would be going to the cabinet committee ... and that's imminent, maybe even next week," Aziz said in his Islamabad office this week. The new plans focus on splitting up the carrier, with the core airline business being separated from vast peripheral operations such as catering, hotels and maintenance, Aziz said. The core airline would then be sold.

But to complete the transaction, Aziz said, the government would have to pass laws in parliament to reverse the 2016 legislation that converted PIA into a limited company and effectively barred the government from giving up management control.

The impetus to sell PIA has grown as the airline has piled up huge losses estimated by its former CEO in March at about $30 million a month. Total debt stood at 186 billion rupees ($1.8 billion) at the end of 2016.

When asked how soon could a buyer could acquire PIA, Aziz said: "Tomorrow morning. If you have the money, come and buy it."

Aziz gave no indication of an expected valuation.

Both Emirates and Etihad had shown interest in buying PIA before the government backed down from privatisation in 2016, the English-language Express Tribune newspaper reported, citing an unnamed official.