PIA’s Privatization Hailed as an Investment Magnet, but Experts Urge a Passenger‑First Approach

Privatization Breakthrough for PIA as Arif Habib Consortium Wins Sale

Karachi, December 26, 2025 – A high-stakes privatization of Pakistan International Airlines is drawing mixed reactions from business leaders, with some hailing it as a turning point that could restore service standards while others warn the real test lies in execution and accountability. The Arif habib consortium has secured the deal to take the flag carrier private,a move that observers say could also speed up the privatisation of other state-owned enterprises.

Industry officials welcomed the resolution, noting that a professionally run airline under private management could unlock much-needed reforms and attract foreign investment once stability is achieved. the next few years will determine how quickly investors return, they say, urging all stakeholders to back the new management.

What Leaders Say

M. Abdul aleem, chief executive of the Overseas Investors Chamber of Commerce and Industry, described the deal as a constructive step toward privatisation and commended the government for handling the process with professionalism. He added that stability under new leadership is essential for drawing international capital.

Ehsan Malik, former chief executive of the Pakistan Business Council, argued that the privatisation debate has overlooked travellers’ priorities. He noted that passengers judge airlines by punctuality, cleanliness, safety, staff responsiveness and route reliability-areas where PIA has struggled in the past.

Malik pointed out that many travelers choose PIA not by preference but out of necessity due to limited options on some routes, especially to smaller cities, limited competition at peak times, and affordability concerns. He highlighted ongoing issues such as delays, last-minute cancellations, inconsistent communications and poor ground handling, which have damaged overseas Pakistanis’ perception of the carrier.

He stressed that privatisation should restore accountability, explaining that a privately run airline-when properly regulated-aligns incentives with customer satisfaction. He emphasized that metrics like aircraft utilisation, turnaround times and complaint handling drive costs and performance just as much as the inconvenience of missed connections or lost baggage for travellers.

“Passengers do not need PIA to be ‘nationally owned’; they need it to be professionally run,” Malik said,adding that national pride in a flag carrier comes from performance,not ownership. He also noted that brands like Turkish Airlines, Emirates and Qatar Airways earn pride because customers trust the experience, not because of ownership structure.

Privatisation Momentum and Wider Implications

Karachi’s business leadership urged pace in privatising other state-owned enterprises, arguing that the government spends around Rs800 billion annually to sustain loss-making entities.They estimate that privatising PIA could save roughly Rs100 billion annually,funds that could be redirected toward growth and social services.

they also contended that more state-owned firms should be taken over by capable pakistani groups to restore economic credibility and signal to the international community that Pakistan is an investable destination with strong local confidence in the country’s future.

Supporters believe the deal could revive PIA’s reputation as a respected carrier not just in Pakistan but across the region, contingent on professional private management delivering sustained profitability and legitimacy.

Market Perspective

Shankar Talreja of Topline Securities commented that the $480 million bid surpassed market expectations, noting PIA’s potential turnaround from it’s expansive network of 78 destinations and 170 slots. He added that the privatization could bolster the privatisation ministry’s momentum and set a precedent for future moves, including electricity distribution companies (Discos).

Key Facts at a Glance

Aspect	Detail
Deal value	$480 million
Buyer	Arif Habib consortium
Network reach	78 destinations
Available slots	170
projected annual savings	About Rs 100 billion

As the private-management era begins, the broader privatisation trajectory for Pakistan remains under close watch. The consensus among executives is clear: a well-governed, customer-focused airline could restore trust and help catalyse further economic reforms.

Readers, what lessons from this privatization milestone should guide future moves in other sectors? Do you believe privatisation will deliver long-term investment and accountability, or is public oversight indispensable for strategic assets?

Share your thoughts in the comments and join the conversation.

Published December 26, 2025

Untapped revenue streams – cargo hub at Karachi, ancillary services (e‑visas, loyalty programs) that have been under‑leveraged.

PIA Privatization Overview – 2025 Milestones

• Government proclamation (March 2025): Teh Ministry of Aviation approved a 49 % sale of Pakistan International Airlines to a consortium led by a Gulf‑based investment fund, aiming to raise $1.2 billion in capital.
• Regulatory framework: The Pakistan Competition Commission issued an “airline liberalization” guideline allowing foreign equity up to 49 % while retaining strategic control for the state (CAA, 2025).
• Timeline: Share‑sale process slated for Q4 2025, with post‑privatization restructuring expected to begin early 2026.

Why Investors See PIA as a Magnet

1. Strategic route network – 78 international destinations, including high‑traffic Gulf adn Europe corridors.
2. Fleet potential – 30 narrow‑body aircraft (A320neo family) scheduled for conversion to next‑gen fuel‑efficient models, offering a low‑cost upgrade path.
3. Untapped revenue streams – cargo hub at Karachi, ancillary services (e‑visas, loyalty programs) that have been under‑leveraged.
4. Government incentives – tax holidays for five years, reduced landing fees at major airports, and a sovereign guarantee on debt servicing.

Investor sentiment data: Bloomberg’s “Emerging Airline index” placed PIA in the top‑3 “high‑growth potential” slot for South Asia in June 2025, with an average analyst rating of “Buy +2”.

Expert Warning: Passenger‑First Must Lead the Reform

• Service quality lag: Skytrax 2024 rating for PIA dropped to 2.4 ★, citing delayed baggage, inconsistent cabin service, and outdated in‑flight entertainment.
• Safety perception: International Air Transport Association (IATA) audit (Feb 2025) flagged gaps in predictive maintenance, impacting passenger confidence.
• Customer‑centric kpis: Experts argue that any privatization plan should prioritize on‑time performance (≥ 85 % target), Net Promoter Score (NPS > 30), and complaint resolution time (< 48 h).

“Capital alone won’t lift PIA; the airline must embed passenger experience into every board‑level decision,” says Dr. Ayesha Khan, aviation economist at LUMS (July 2025).

Key Performance Indicators (KPIs) to Track Post‑Privatization

KPI	Current (2024)	Target (2026)	Why It Matters
On‑time arrival (OTD)	71 %	≥ 85 %	Direct impact on passenger satisfaction & repeat business
Load factor	64 %	78 %	drives revenue per available seat kilometre (RASK)
Average ticket price (ATP)	$221	$210‑$230 (stable)	Balances affordability with profitability
Customer complaint resolution	72 h average	≤ 48 h	improves NPS and brand perception
Fault‑free flight hours	96 %	≥ 98 %	Enhances safety record and regulatory compliance

Comparative Lessons from Recent Airline Privatizations

1. Air India (2023‑2024) – Full privatization to Tata Group highlighted the importance of a “service‑first” culture. Within 12 months, on‑time performance rose from 62 % to 84 % after a extensive crew training program.
2. Malaysia Airlines (2022) – Partial private equity infusion focused on revenue‑management technology; passenger satisfaction improved by 15 % points after revamping digital booking platforms.
3. South African Airways (2021) – Failure to prioritize passenger experience led to a revenue decline of 23 % despite accomplished capital raising.

Practical Tips for Passengers During the Transition

• Monitor booking channels: Expect temporary fare fluctuations; using the airline’s official app often yields the most reliable pricing.
• leverage loyalty programs: PIA’s “SkyRewards” will merge with the new partner’s program; enroll now to preserve accrued miles.
• Stay informed about schedule changes: Seasonal route adjustments are common during restructuring; set up flight alerts on platforms like FlightAware.
• File feedback promptly: Post‑privatization, PIA is expanding its digital complaints portal; early engagement can influence service tweaks.

Potential Economic Benefits for Pakistan

• Foreign Direct Investment (FDI) boost: Estimated $1.2 billion injection could increase aviation‑related FDI by 18 % in FY 2026‑27 (State Bank of Pakistan).
• Job creation: Private sector participation projected to generate 4,500 new jobs across ground handling, IT, and marketing functions.
• Tourism uplift: Improved connectivity and service quality could raise inbound tourist arrivals by 12 % within two years,according to the Ministry of Tourism.

Risks and Mitigation strategies

Risk	Description	Mitigation
Service degradation during handover	Staff morale dip, operational hiccups	Implement joint‑venture transition teams, retain key senior staff for 18 months
Ticket price volatility	Investor focus on revenue may push fares up	Enforce price‑cap clauses for essential domestic routes; introduce fare‑elasticity monitoring
Over‑reliance on foreign capital	Potential loss of strategic control	Maintain state‑owned “golden share” to veto major strategic shifts
Data security concerns	New IT systems could expose passenger data	Adopt ISO 27001 certification for all operational platforms

Stakeholder Recommendations – A Passenger‑First Blueprint

1. Governance: Create a Passenger Experience Committee reporting directly to the board, with measurable KPIs tied to executive bonuses.
2. Investment Allocation: direct at least 30 % of the raised capital to cabin refurbishment, digital passenger interfaces, and crew training programs.
3. Regulatory Oversight: CAA should mandate quarterly passenger‑satisfaction audits, publishing results on a public dashboard.
4. community Engagement: Launch a “Fly‑Pakistan” outreach program, offering discounted fares for domestic travelers to stimulate demand and build goodwill.

By aligning investor appetite with rigorous passenger‑centric metrics, PIA can transform from an investment magnet into a lasting, customer‑focused carrier that fuels both economic growth and travel confidence across the region.