Bankrupt Pakistan To Sell Loss-Making Airlines PIA For IMF Loans: All You Need To Know

Pakistan’s struggling economy has taken another major step toward privatisation as the government prepares to sell its national airline, Pakistan International Airlines (PIA), under pressure from the International Monetary Fund (IMF). The sale is part of the IMF’s strict conditions for a USD 7-billion loan programme approved in September 2024.

Pakistan Prime Minister Shehbaz Sharif announced that PIA’s bidding will be held on December 23, 2025, and will be broadcast live on all media platforms. On Wednesday, he met the four companies that have pre-qualified for the sale. According to Dawn, this will be Pakistan’s first major privatisation move in nearly 20 years.

According to India Today, the government plans to divest between 51 to 100 percent of PIA’s shares. Four bidders have been cleared: Lucky Cement Consortium, Arif Habib Corporation Consortium, Air Blue Limited and Fauji Fertiliser Company Limited, which is part of the military-run Fauji Foundation. The military’s influence over Pakistan’s economy remains strong, even though Army Chief Field Marshal Asim Munir does not hold a direct board position. Through institutional control and key appointments, the army continues to exert indirect oversight on the sprawling Fauji Foundation.

Privatisation Minister Muhammad Ali recently told Reuters that Pakistan is targeting Rs 86 billion from privatisation proceeds this year. In the last round of bidding, the government was set to receive 15 percent of the earnings from the PIA sale.

Pakistan urgently needs the money. For years, the country has relied on loans to repay older loans, pushing it to the edge of a default in 2023. Defence spending remains one of its largest and least flexible expenses. Pakistan is currently the IMF’s fifth-largest debtor, with more than 20 loan programmes since 1958.

PIA’s collapse did not happen overnight. The airline entered a severe crisis in 2020 after it was revealed that more than 30 percent of pilots held fake or questionable licences. This scandal led to the grounding of 262 pilots and prompted bans on PIA flights by the EU, UK and US. The loss of these profitable routes drained the airline of billions.

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