Uphill task

The government is continuing in its latest effort to privatise PIA, months after the previous failed attempt led to an embarrassing situation where a bidder with questionable credentials offered a laughably low bid that did not even meet the minimum bid. Two earlier privatisation attempts have also collapsed in the past two years. But despite the noticeably low interest in the market, privatisation is a critical condition of the IMF's recent bailout, which has made the government a motivated seller.

While PIA and the government may claim the airline has gotten its act back in order after it posted a small operating profit in 2024, after 21 consecutive loss-making years, the truth is far more nuanced, as state-administered life support made it possible.

About 80% of its debt was offloaded onto public coffers, and several tax exemptions have buoyed its balance sheet and made the airline more attractive to suitors.

Unfortunately, the opacity of the bidding process has been a challenge for some otherwise competent potential bidders who are rich in expertise but may lack deep pockets. And despite the government's attempt to make qualification criteria stricter, most of the parties vying for the airline are not active in aviation-related industries.

The government should also look into some creative solutions that allow it to receive fair payment — perhaps in guaranteed installments with some deferral period — instead of setting unattainable deadlines for what could be one of the biggest corporate deals in Pakistan's history. It is also worth reanalysing why there has been so little international interest in the airline.

Market experts have noted the government's desire for PIA to remain Pakistani creates a conflict between pride and practicality. But the domestic airline industry is competitive enough to pick up the slack even if a prospective buyer wants to streamline PIA's operations. The focus should be on getting taxpayers some value for the billions they have poured down the drain.