PIA Sold to Arif Habib Group in Historic Rs135bn Deal

PIA’s Revival Plans Under Arif Habib Consortium
Ali Imran Chattha Nazrana Times
 

Following the successful privatisation of Pakistan International Airlines (PIA) on 23 December 2025, the consortium led by Arif Habib has outlined an initial roadmap to revive the national carrier and restore its commercial viability. The consortium comprises Arif Habib Corporation Limited, Fatima Fertiliser Company Limited, City Schools Private Limited, and Lake City Holdings Private Limited.
The strategy seeks to transform PIA from a chronically loss-making airline into a profitable and competitive entity through substantial capital injection, operational restructuring, and optimal utilisation of existing assets. Whilst a comprehensive long-term plan remains under finalisation owing to the recency of the acquisition, several key elements have emerged from official statements and the privatisation framework.
Financial Reinvestment and Debt Management
Of the Rs135 billion bid, 92.5 per cent—approximately Rs124.875 billion—will be reinvested directly into PIA to bolster its balance sheet and support operational revival. The remaining 7.5 per cent, or Rs10.125 billion, will be paid to the federal government as cash consideration.
Prior to privatisation, the government absorbed over Rs650 billion in PIA’s legacy liabilities, effectively cleansing the airline’s finances. This is anticipated to save taxpayers nearly Rs35 billion annually in subsidies previously required to sustain operations.
Fleet Expansion and Modernisation
A central pillar of the revival is fleet expansion. The consortium plans to increase PIA’s operational fleet from the current 18 aircraft to between 30 and 40. This will entail acquiring new aircraft, refurbishing grounded engines, and upgrading existing ones to enhance reliability and route coverage.
The new owners intend to capitalise on PIA’s valuable assets, including prime landing slots at major international airports and bilateral air service agreements with 97 countries, to broaden international routes and improve connectivity.
Operational and Workforce Reforms
Job security for employees has been assured for at least one year post-privatisation. The incoming management has pledged timely salary payments, governance improvements, and professional practices to boost efficiency and morale.
Operational reforms will target the elimination of persistent losses, which reached approximately Rs75 billion in FY2023. Although PIA recorded a Rs26.2 billion profit in FY2024, this was primarily attributable to debt relief rather than underlying performance. The ultimate goal is self-sustainability without government support, alongside enhanced service quality and customer experience.
Strategic Vision
The consortium views the acquisition as a genuine turnaround opportunity, aiming to reclaim PIA’s former prominence amongst global airlines. Leveraging expertise in capital markets, energy, and real estate, the Arif Habib Group emphasises value creation through restructuring and disciplined investment.
The privatisation agreement permits the addition of up to two further partners post-acquisition, potentially introducing specialised aviation or financial expertise to expedite recovery.
This transaction represents a cornerstone of Pakistan’s IMF-supported economic reforms to alleviate the fiscal strain from state-owned enterprises. As the handover advances, detailed timelines for fleet growth, route expansion, and performance milestones are expected from the new management.