ISLAMABAD: The Privatisation Commission on Monday announced the formal transfer of management control of Pakistan International Airlines Corporation Limited (PIACL) to the Arif Habib Corporation-led consortium, culminating the privatisation process that began last year.
“The government achieves first financial closing of PIACL privatisation transaction with management control transferred to the investor consortium following satisfaction of all conditions precedent under the Share Purchase and Subscription Agreement (SPSA),” said the Privatisation Commission after a meeting of the restructured PIACL board.
The new board appointed Lt Gen (retd) Anwar Ali Haider, managing director of Fauji Foundation, as the first chairman of the privatised entity.
In its press release, the commission commended the “support and guidance” of Prime Minister Shehbaz Sharif, Deputy Prime Minister and Foreign Minister Ishaq Dar, Finance Minister Muhammad Aurangzeb, and other relevant cabinet committees and officials.
“Since execution of the SPSA on January 29, 2026, the Privatisation Commission and other GoP stakeholders including Ministry of Defence completed a challenging Condition Precedents under the SPSA, the PC said. “
“These included domestic and overseas regulatory approvals, lessors and commercial consents, aviation policy reforms, corporate approvals, restructuring of taxation relating to legacy liabilities, aircraft financing arrangements, governance changes, tax-related matters, airport infrastructure arrangements, and the provision of transaction security by the investor consortium,” the statement said.
There were a total of 40 Conditions Precedents in regulatory, commercial and contractual consents, taxation matters, shareholders restructuring, rental rearrangements and governance matters.
On the regulatory side, the transaction required approvals, notices and confirmations from multiple regulatory authorities. These included aviation-related approvals from the Pakistan Civil Aviation Authority, merger control filings with the Competition Commission of Pakistan, and change-of-control-related processes involving the Pakistan Telecommunication Authority.
Given PIACL’s international operations, coordination was also required with foreign aviation authorities and aviation safety bodies. In this regard, international merger control clearances in relevant foreign jurisdictions, including Saudi Arabia and Kuwait, were obtained.
These approvals were necessary to ensure that PIACL could continue operating under the required regulatory permissions following first closing.
On the commercial side, a key part of the process was the satisfaction of contractual consent requirements. PIACL was required to obtain 22 contractual consents under the SPSA from a wide range of counterparties, including aircraft lessors, maintenance, repair and overhaul (MRO) and technical service providers, aviation fuel suppliers, airline partners, payment service providers and other operational counterparties.
These consents were necessary to ensure that important commercial and operational arrangements remained in place after the change in shareholding and that the transaction did not trigger termination rights, defaults or disruption to PIACL’s operations, as well as to release encumbrances over company-owned aircraft, engines and leases.
The process also involved approval of the transaction by PIAHCL and PIACL shareholders, amendments to PIACL’s Articles of Association to incorporate the Shareholders’ Agreement framework and its subsequent approval by the SECP, increase in authorised share capital, and completion of all corporate actions necessary for issuance of new shares.
It also included legal cover for extension of the “Essential Services” notification to ensure industrial peace and continuity of airline operations, while providing employee protection provisions and retention commitments.
The Pakistan Aviation Authority’s (PAA) infrastructure rental arrangements have also been extended under existing agreements relating to PAA-owned properties for three years. These properties are located in different cities of Pakistan. In addition, implementation of mechanisms agreed in the SPSA for payment of PAA legacy liabilities and bridge financing obligations has also been completed.
In terms of taxation issues, protection has been provided through a mechanism for structured repayment of outstanding liabilities, protection of PIACL from coercive recovery actions relating to legacy tax matters, and incorporation of HS Codes, as agreed in the SPSA, into the Sales Tax Act.
Moreover, policy reforms included amendments to the National Aviation Policy addressing airfare regulation, wet leasing, negative equity provisions and aircraft retirement age, as well as preservation of key fiscal and operational incentives for an extended period after completion.
The commission added that the conditions precedent were completed within an exceptionally compressed timeframe while maintaining uninterrupted airline operations, preserving critical commercial relationships and aviation certifications, protecting employees’ interests and ensuring continuity of services for passengers throughout the transition.
The bidding process, held on December 23, 2025, led to total investment commitments by the consortium of Rs180 billion, out of which Rs55bn will be paid to the government for the sale of PIA and Rs125bn will be injected into PIACL to support the long-term transformation of the airline and revive the national carrier.
Accordingly, following the successful achievement of the conditions precedent under the first closing, the consortium on Monday completed payment of Rs10bn to the government as sale proceeds and injected Rs80bn into PIACL as fresh equity to strengthen the airline’s financial position, support fleet expansion and modernisation, expand its route network, and enhance operational performance and customer service, the PC said.
The second financial closing is scheduled to take place within twelve months of the first closing, in accordance with the terms of the SPSA, whereby the consortium has committed to invest a further Rs45bn into PIACL. The consortium has also expressed its intent to purchase the remaining 25pc of PIACL shares under a call option in the SPSA for an additional payment of Rs45 billion to the government, it added.
Adviser to the Prime Minister on Privatisation Muhammad Ali said: “This transaction demonstrates Pakistan’s ability to execute complex strategic transactions through a transparent, fair, competitive and professionally managed process. It reinforces the government’s commitment to economic reform, fiscal responsibility and greater private-sector participation, while strengthening confidence among domestic and international investors.”
A spokesperson for PIA Equity Ltd, an SPV of the winning consortium led by Arif Habib Corporation, said it had consolidated 100pc private ownership of the airline, executing a comprehensive transaction valued at approximately Rs180 billion. “The strategic alliance represents an unprecedented alignment of industrial, financial and institutional strength,” he said.
The latest shareholding pattern puts Arif Habib’s Fatima Fertiliser as the lead owner with a 34.1pc stake, followed by Fauji Fertiliser with 33.9pc, while Lake City, City Schools and AKD Group each hold 16pc. The consortium now has full control over the national flag carrier.
The new board chairman, Lt Gen Anwar Ali Haider, said on the occasion that while the corporate structure has evolved, the airline’s fundamental responsibility to the people of Pakistan remains paramount. “As the new ownership officially takes over today, we deeply understand that the trust of a nation isn’t simply transferred on a document. Trust is earned — mile by mile, smile by smile, year by year. We know this. And we accept the challenge wholeheartedly,” he said.
“As the airline enters this promising chapter under the new banner, the underlying promise to our passengers stays resolute. PIA will continue to honour its deep-rooted heritage while building a premium, modern aviation experience. The journey ahead is a collective commitment to excellence, proving once again why we are, and always will be, Great People to Fly With,” he concluded.
