In a pivotal session of the Pakistan International Airlines (PIA) holding company's board of directors, participants were briefed on the potential lifting of the ban on PIA flights to Europe next month, foreseeing substantial profits for the airline and aiding its privatisation. During the Thursday meeting, fresh insights into the reorganisation of PIA were unveiled, as per official sources.
The PIA works department apprised the board of assets worth billions of rupees across the United States, Paris, the Netherlands, and Pakistan. Discussions centred on the divestment of PIA's assets, encompassing aircraft and routes.
It was emphasised that investor interest in acquiring PIA would surge with the resumption of European flights, projecting annual revenues in billions of rupees from the anticipated reinstatement.
The European Union Aviation Safety Agency (EASA) had enforced a flight ban on the national carrier following a tragic plane crash in Karachi in May 2020, claiming 97 lives. The subsequent investigation revealed irregularities in the licensing process for commercial pilots.
Chaired by Tariq Bajwa, the holding company's meeting contemplated a proposal to facilitate the retirement of additional PIA employees through a voluntary retirement scheme.
Read also: ‘Clandestine’ PIA sale irks Rabbani
On March 28, the newly constituted holding company, entrusted with PIA's privatisation, endorsed the restructuring of the airline's Rs268 billion commercial debt.
An official press release from the Special Investment Facilitation Council (SIFC) website disclosed that banks had agreed to extend the debt repayment period to ten years and cap interest rates at a maximum of 12%.
Should privatisation not materialise within three years, banks reserve the right to renegotiate terms, potentially reverting to original interest rates in 2027.
The government aims to submit a scheme of arrangement to the Securities and Exchange Commission of Pakistan (SECP) to finalise privatisation by June 11.
Bidding for PIA is imminent, with plans to bifurcate the airline into two entities, with the holding company absorbing bad debts exceeding Rs650 billion.
The government will undertake annual interest payments of Rs32 billion to banks, with debt settlement contingent upon privatisation proceeds or budget allocations.
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