Arif Habib consortium plans to expand PIA fleet to 64 aircraft after Rs135bn takeover

• Habib confirms Fauji Fertiliser has also joined corporate consortium.
• Adds remaining 25% stake would fetch Rs45 billion to exchequer.
• Govt expects airline operations under new owner by April 2026.

Arif Habib, the founder of one of the leading business groups in Pakistan,  said on Wednesday his consortium plans to expand the Pakistan International Airlines' (PIA) fleet to 64 aircraft in phases after acquiring a majority stake under the government's privatisation process.

The Arif Habib Corporation Limited-led consortium acquired a 75% majority stake in PIA with the highest bid of Rs135 billion in an auction held for the privatisation process of the national flag carrier on Tuesday.

During the open auction round, Arif Habib raised its bid from Rs115 billion to Rs135 billion after the Lucky Cement Limited-led consortium increased its earlier bid of Rs101.5 billion to Rs134 billion in the second round of the open bidding.

"We have 90 days, and we also intend to buy the remaining 25%," Habib said while talking to a private news channel, adding that the group had been interested in acquiring 100% ownership of the national airline.

Habib said the government would receive proceeds worth Rs10 billion against the sale of a 75% shareholding, while the remaining 25% stake would fetch Rs45 billion. 

He also confirmed that Fauji Fertiliser Company Limited had also joined his business group-led consortium.

Outlining operational plans, Habib said the number of aircraft would be increased to 38 in the first phase and to 64 in the second phase.

He further stated that the national airline had liabilities of Rs190 billion, while its assets were valued at around Rs180 billion.

Adviser to Prime Minister on Privatisation Muhammad Ali told Reuters that the state expects a new owner to be running the airline by April, subject to approvals.

The process now moves to final approvals by the Privatisation Commission board and the cabinet, expected within days, with contract signing likely within two weeks and financial close after 90 days to meet regulatory and legal conditions.

The deal was structured to inject fresh capital into the airline rather than simply transfer ownership, he said. "We did not want a situation where the government sells the airline, takes its money, and the company still collapses," Ali said.

Ali said safeguards, including retained earnest money and an additional payment on signing, would allow the government to move to the second-highest bidder if the deal fails to close.

On labour, the PM's aide said the buyer must retain all employees for 12 months after the transaction, with contracts unchanged, adding that the PIA workforce has already shrunk in recent years.

The sale is closely watched by the International Monetary Fund (IMF), which has pressed Pakistan to halt losses at state-owned enterprises.

Ali said the privatisation was a key test of Pakistan's reform credibility with the IMF, adding that failure to offload loss-making state firms risked renewed pressure on public finances.

He said closing the deal would signal momentum on reforms and privatisations, adding that the government was working through a pipeline of future transactions once PIA closes.

Additional input from Reuters