ISLAMABAD: The Pakistani government has renewed its efforts to privatize the loss-making Pakistan International Airlines (PIA) and plans on inviting local businessmen to the new bidding process, Prime Minister Shehbaz Sharif said on Monday.
Pakistan’s government has been scrambling to find a buyer to privatize the debt-ridden airline since late last year, when a deal fell through after a potential buyer reportedly offered a fraction of the asking price.
The airline posted losses of $270 million in 2023, according to local media reports. Its liabilities were nearly $3 billion, about five times the total worth of its assets.
Speaking at a ceremony in Islamabad, Sharif said a new effort was being carried out to privatize the airline, so that PIA becomes the PIA of its heydays in the ‘60s.
“This time we are inviting Pakistani businessman from Karachi, Quetta, Peshawar and Lahore,” Sharif said in televised comments. “A new bidding process will be carried out, whichever group wins the bid, PIA will be given to them.”
The development comes weeks after PIA resumed its operations in Europe, with the first flight to Paris on Jan. 10, following a hiatus of four years.
The airline was restricted in 2020 by the European Union Aviation Safety Agency (EASA), United Kingdom (UK) and the United States (US) after Pakistan launched an investigation into the validity of pilots’ licenses issued in the country, following a PIA plane crash in Karachi that killed 97 people. EASA lifted its ban on PIA in November last year, however, the airline remains barred from flying to the UK and the US.
Separately on Monday, a delegation from the UK’s Department for Transport and Civil Aviation Authority arrived in Pakistan to conduct a safety assessment ahead of the resumption of PIA flight operations between the two countries, according to the Pakistan Civil Aviation Authority (PCAA).
“There will be several high-level meetings between the two sides,” the PCAA said in a statement. “The discussions will examine aviation safety protocols, review documentation, and evaluate operational procedures.”
Pakistan’s government hopes the opening of European routes, which officials expect will be followed by a similar announcement by the UK later this year, will boost PIA’s selling potential.
“We will take PIA back to the slogan ‘Great People To Fly With’,” Sharif said at the Islamabad ceremony. “This is difficult but not impossible.”

KARACHI: Pakistan’s central bank cut its benchmark interest rate by 100 basis points to 12 percent on Monday, in line with expectations, as the bank expects an uptick in economic activity after 1,000 basis points of rate cuts over the last six months.
The State Bank of Pakistan has slashed rates from an all-time high of 22 percent last June, one of the most aggressive moves among central banks in emerging markets and exceeding its 625 bps of rate cuts in 2020 during the COVID-19 pandemic.
The bank’s governor Jameel Ahmad said at a press conference that the inflation rate would ease further in January but noted core inflation remained elevated. He said the forecast for full-year inflation in the year to June was an average of 5.5 percent-7.5 percent.
“Considering these developments and evolving risks, the Committee viewed that a cautious monetary policy stance is needed to ensure price stability, which is essential for sustainable economic growth,” the bank’s monetary policy committee (MPC) said in a statement accompanying the decision.
“In this regard, the MPC assessed that the real policy rate needs to remain adequately positive on a forward-looking basis to stabilize inflation in the target range of 5 – 7 percent.”
Fourteen of 15 analysts surveyed by Reuters expected the central bank to cut its key rate by at least 100 bps mainly due to a drop in inflation.
Pakistan’s consumer inflation rate slowed to an over 6-1/2-year low of 4.1 percent in December, largely due to a high year-ago base. That was below the government’s forecast and significantly lower than a multi-decade high of around 40 percent in May 2023.
The governor said the bank maintained its forecast of full-year GDP growth at 2.5 percent-3.5 percent and said economic growth would pick up in the next six months, which would help boost the country’s previously struggling foreign exchange reserves.
“The improved current account outlook, along with the expected realization of planned financial inflows, is likely to increase the SBP’s FX reserves beyond $13 billion by June 2025,” the bank’s statement said.
However the SBP also highlighted several risks for inflation, including protectionist policies by “major economies.” United States President Donald Trump has said he is considering imposing tariffs on goods from several countries.
Pakistan’s economy grew 0.92 percent in the first quarter of fiscal 2024-25 which ends in June, according to data approved by the National Accounts Committee and released by its Statistics Bureau in December.