Under mounting pressure from International Monetary Fund to curb expenditure and overhaul its fragile economy, Pakistan has pushed ahead with the privatisation of its struggling national carrier, Pakistan International Airlines. One of the four shortlisted bidders is Fauji Fertiliser Company Limited, which is part of the powerful, military-controlled Fauji Foundation.
Shehbaz Sharif said on Wednesday that the bidding for Pakistan International Airlines will be held on December 23, 2025, and broadcast live across all media platforms. He made the announcement after meeting representatives of the shortlisted bidders in Islamabad.
A month earlier, Pakistan’s Privatisation Minister Muhammad Ali told Reuters that the government is targeting PKR 86 billion in privatisation revenue this year. Under the proposed framework, 15% of the proceeds from the earlier bidding round were earmarked for the government, while the remaining amount would stay with the airline.
According to Dawn, the sell-off marks Pakistan’s first major privatisation in nearly 20 years. The four approved bidders are:
- Lucky Cement Consortium
- Arif Habib Corporation Consortium
- Fauji Fertiliser Company Limited
- Air Blue Limited
Though Army Chief and de facto Pakistan power centre Field Marshal Asim Munir does not sit directly on the Fauji Foundation board, he exerts strong institutional influence. As head of Pakistan’s armed forces, Munir appoints the Quartermaster General (QMG), who sits on the Foundation’s Central Board of Directors. Through such appointments and strategic oversight, the military maintains significant sway over one of Pakistan’s largest corporate conglomerates.
IMF conditions: Fiscal reform and debt management
The privatisation push comes as Pakistan survives on repeated bailouts and debt rollovers. Its economy nearly collapsed in 2023 under the weight of mounting loans, chronic mismanagement, and heavy defence spending. Pakistan is currently the IMF’s fifth-largest debtor, having taken more than 20 loans since 1958.
The latest $7-billion IMF programme, approved in September 2024, released $1 billion upfront, with the remainder tied to strict fiscal reforms—including the sale of state-owned enterprises such as PIA. The IMF’s conditions were clear: Pakistan had to reduce fiscal deficits, improve revenue collection, and generate proceeds from privatisation to secure the next tranche of funds. Without meeting these conditions, access to IMF support, crucial for stabilising Pakistan’s debt-laden economy, would be jeopardised.
Decades of mismanagement at PIA
PIA’s downfall has been decades in the making, but the crisis escalated in 2020 when the government admitted that over 30% of Pakistani pilots held fake or dubious licences, forcing the grounding of 262 pilots.
The fallout was swift and severe:
EASA banned PIA flights to Europe in June 2020—cutting off some of its most profitable routes.
The UK and the US imposed similar restrictions.
The airline lost billions in revenue, and its reputation plunged.
Meanwhile, PIA was already struggling with chronic overstaffing, political interference, nepotism, and corruption. Its bloated workforce and mismanaged operations pushed losses beyond PKR 200 billion.
The 2020 crash of PIA Flight 8303, which killed 97 people, triggered costly safety audits, groundings, and emergency repairs. With resources drained and international bans in place, the airline spiralled deeper into financial ruin.
Privatisation: Meeting IMF demands and economic survival
PIA’s decline mirrors Pakistan’s broader economic challenges: prolonged systemic failures, weak governance, and entrenched institutional decay. The IMF’s pressure to privatise PIA is part of a broader strategy to enforce fiscal discipline, raise non-debt revenue, and reduce the state’s burden of loss-making enterprises.
Privatisation of PIA is therefore both a response to decades of mismanagement and a critical IMF-mandated condition to secure further financial assistance and stabilise Pakistan’s struggling economy.
(Inputs from agencies)
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