The Airline That Taught the World to Fly: The Privatisation of PIA | Pakistan International Airlines Sales
By Sadiq Rahi
For much of the developing world in the 1960s and 1970s, Pakistan International Airlines (PIA) was not merely a national carrier, it was a global aviation mentor. Established in 1955, PIA emerged at a time when air travel was still the privilege of a few, and professional aviation expertise was scarce outside Europe and North America. | The Privatisation of PIA
PIA filled that gap. Its pilots, engineers, trainers, and flight operations specialists became a human /export long before labour migration became Pakistan’s economic backbone. Aviation historians and international accounts consistently note that early Gulf aviation relied heavily on manpower trained by PIA. Emirates, which today ranks among the world’s most profitable airlines, benefited in its formative years from Pakistani aviation professionals,
many of them trained or seasoned at PIA. Similar institutional linkages existed across the Gulf, including with Gulf Air and other regional carriers. | Governance Failures and Politics
There was a reason PIA once carried the slogan:
“Great People to Fly With.”
It was not marketing bravado; it reflected institutional confidence.
Governance Failures and Politics
There was a reason PIA once carried the slogan: “Great People to Fly With.” It was not marketing bravado; it reflected institutional confidence.
From a Global Network to a Shrinking Footprint.
At its peak, PIA connected Pakistan to North America, Europe, East Asia, the Middle East, and Africa. It flew to New York, Chicago, Toronto, London, Paris, Frankfurt, Copenhagen, Barcelona, Tokyo, Beijing, Bangkok, Nairobi, and Johannesburg. These routes were not just destinations; they represented strategic aviation corridors secured through bilateral air service agreements.
Perhaps more valuable than aircraft themselves were PIA’s landing and parking rights (slots) at some of the world’s most congested airports. In global aviation, these rights are finite and often more valuable than fleets. Once lost, they are rarely regained.
By 2025, however, this expansive footprint had dramatically contracted. PIA’s operational fleet had shrunk to roughly 30–32 aircraft. Numerous long-haul routes were discontinued, and valuable slots remained underutilised or vulnerable. What was once a global network had become a fragile skeleton. | The Privatisation of PIA
How a World-Class Reputation Collapsed:
PIA’s decline was neither sudden nor mysterious. It unfolded slowly, across decades, through systematic erosion of governance.
Political interference became routine. Boardrooms turned into extensions of ministries. Merit-based appointments gave way to loyalty-based placements. Overstaffing grew to levels far exceeding international benchmarks per aircraft, while accountability steadily weakened. Fleet renewal was delayed repeatedly, increasing fuel inefficiency and maintenance costs. These weaknesses fed into public scandals that further damaged credibility.
The most devastating blow came in 2020, when revelations about pilots holding questionable or improperly verified licences triggered an immediate crisis of confidence. European aviation regulators responded by suspending PIA’s operations across the European Union. Although flights were later restored following compliance audits and corrective measures, the reputational damage was profound.
In aviation, safety perception is everything. Once shaken, recovery takes years; not press releases.
The IMF Factor:
Reform or Compulsion?
According to reporting by Al Jazeera and official government disclosures, PIA’s privatisation cannot be viewed in isolation. It was deeply embedded within Pakistan’s broader engagement with the International Monetary Fund (IMF).
Repeated IMF programmes emphasised structural reform of state owned enterprises, particularly those described as “chronic loss-makers.” PIA, burdened with liabilities exceeding PKR 800 billion, became emblematic of this category. The logic was fiscal: continued state support was unsustainable, and privatisation or restructuring was framed as unavoidable.
Yet this raises an uncomfortable question. Was PIA privatised because reform had failed; or because reform was never seriously attempted? | The Privatisation of PIA
What Was Actually Sold
In December 2025
The government transferred 75 percent of PIA’s operating company to a private consortium. The declared transaction value stood at approximately PKR 135 billion, though only about PKR 10 billion entered the national exchequer as immediate cash. The remaining amount was structured as future investment commitments spread over several years.
Crucially, all legacy debt, pension liabilities, and legal obligations were transferred to a government
owned holding entity. The buyer received a debt-free airline, while the taxpayer retained decades of accumulated losses.
This structure is not unprecedented in distressed privatisations, but it became the focal point of public anger. To many Pakistanis, it appeared less like strategic reform and more like a financial cleansing of an asset before handover.
Limited Contenders, Lingering Doubts
Despite PIA’s assets, the bidding process attracted a limited field. Major global airline groups stayed away, citing political risk, regulatory uncertainty, and Pakistan’s challenging aviation market. This absence raised questions about valuation, transparency, and whether a wider international bidding process could have yielded better terms.
Why the Political Storm?
Opposition parties, labour unions, and segments of civil society questioned the timing and terms of the sale. Why privatise just as European routes were reopening?
These questions resonated because PIA is not an ordinary enterprise. It is a national symbol, embedded in collective memory from migrant workers flying home to students boarding their first international flight.
As Al Jazeera observed, the sale triggered not just an economic debate, but a crisis of national sentiment.
Limited Contenders, Lingering Doubts:
Despite PIA’s assets, the bidding process attracted a limited field. Major global airline groups stayed away, citing political risk, regulatory uncertainty, and Pakistan’s challenging aviation market. This absence raised questions about valuation, transparency, and whether a wider international bidding process could have yielded better terms.
A national airline of this scale, critics argue, deserved global competition—not quiet conclusion. | The Privatisation of PIA
PIA AT A GLANCE
Established: 1955
Peak international destinations: Over 40
Operational fleet (2025): ~30–32 aircraft
Key assets: International traffic rights, landing & parking slots at major global airports
Total liabilities (pre-restructuring): Over PKR 800 billion
Privatisation structure: 75% sold; 25% retained by government
Immediate cash inflow: ~PKR 10 billion
Legacy debt & pensions: Retained by the state
Major disruption: EU flight ban in 2020; partial restoration later.
What Comes After PIA?
The privatisation of PIA sets a ppowerful precedent. If failure of governance becomes justification for sale, then other state assets;
railways, power distribution companies, logistics infrastructure
may follow the same path.
The danger lies not in privatisation itself, but in normalising abdication. States do not strengthen themselves by shedding responsibility; they strengthen themselves by learning how to govern.
Conclusion:
A Mirror, Not a Victory
PIA did not collapse because Pakistan lacked pilots, engineers, or talent. It collapsed because institutions were sacrificed at the altar of politics.
Selling PIA may ease fiscal pressure. It may even improve operational efficiency. But it does not erase the larger truth:
This was not the failure of an airline.
It was the failure of governance.
History will remember PIA not for how it was sold, but for what it once was a national carrier that helped build global aviation, and a reminder of what Pakistan can achieve when institutions are protected rather than plundered.
About Author: Sitara-e-Imtiaz (Military), a senior retired officer of Pakistan Army,
is a policy and governance analyst specialising in state institutions, civil-military governance, and public-sector reform. He has over 35 years of experience across strategic planning, security management, and large public and corporate organisations.
He has represented Pakistan at international policy forums, including the United Nations Office at Geneva, where he engaged with state parties on security governance, regulatory compliance, and institutional accountability. His professional background spans senior leadership roles in defence, public utilities, and the financial sector, providing him with direct exposure to the structural challenges of state-owned enterprises.
His writing focuses on evidence-based analysis of governance failures, political economy, and institutional reform in developing states. He advocates policy solutions rooted in rule of law, depoliticised management, and sustainable public-sector restructuring rather than ad-hoc privatisation. | The Privatisation of PIA
US launches strike against Daesh militants in northwest Nigeria
