PIA buyer to get major tax relief, Senate Committee informed

ISLAMABAD: The government has informed the Senate Standing Committee on Privatization that the privatization of Pakistan International Airlines (PIA) will take place on December 23, with all outstanding matters expected to be finalized by December 19, ARY News reported.

Secretary Privatization Commission Usman Bajwa told the committee that the prospective buyer of PIA will be exempted from paying sales tax on the purchase of new aircraft. He said several financial and tax-related hurdles that affected the previous privatization attempt have now been resolved.

Officials clarified that, unlike the last attempt, the investor will not be required to pay Rs33 billion in outstanding liabilities. The successful bidder will also not bear Rs26.6 billion in dues payable to the FBR, nor Rs7 billion owed to Pakistan Aviation.

The Privatization Commission informed the committee that 51 percent to 100 percent shares of PIA will be offered for sale. It added that issues related to taxes and incentives have been settled this time, noting that earlier the government could not secure timely GST relief from the IMF.

Officials further highlighted that UK and European routes have now reopened, improving PIA’s commercial outlook. Final commercial terms with investors are expected to be concluded by tonight.

The committee was told that investors will be required to submit Rs2 billion as bid security to participate in the bidding process. Following privatization, the new owner will have to arrange Rs80 billion in financing for PIA immediately.

The government expressed optimism that the improved terms and route restorations would make the privatization process more attractive for investors.

PIA Privatization Enters Final Phase

Earlier, the privatization process of Pakistan International Airlines (PIA) entered its final phase as senior management of the national air carrier held key meetings with officials of all four bidding consortiums, including a final session with the CEO PIA.

According to details, separate meetings of the consortiums were also held in Karachi, Lahore, and Islamabad, while PIA and the Privatization Commission continued to provide records on a daily basis. Sources confirmed that all four consortiums are taking the PIA privatization process seriously and are actively preparing their bids.

For bid preparation, financial and HR experts from the consortiums have obtained complete operational and administrative records from PIA. The final briefing was attended by the CEO PIA, Chief Finance Officer, Chief HR Officer, and other senior PIA officials.

Sources said all consortiums will submit their bids for Pakistan International Airlines on December 23, and the airline will be handed over to the consortium offering the highest bid.

At present, PIA operates 34 aircraft on more than 90 domestic and international routes. Detailed information regarding PIA’s 7,500-plus employees has been shared, including pilots, engineers, cabin crew, and ground staff. Records of Pakistan International Airlines staff posted in Karachi, Lahore, Islamabad, and overseas stations were also provided.

In addition, data related to PIA’s daily revenue from domestic and international routes has been handed over. Sources said records of retired PIA employees were also shared, clarifying that pension liabilities will not fall under the new management.