According to recent news, government of Pakistan has registered a new organization Pakistan Airways as a ‘premium service subsidiary’ of the Pakistan International Airlines (PIA).
Secretary Privatisation Commission Ahmed Nawaz Sukhera last week confirmed the government’s intent to move ahead with privatisation of Pakistan International Airlines (PIA), Dawn reports.
“Currently, it is under consideration to bifurcate PIA into core and non-core businesses. The core business will comprise PIA flight operations, landing and handling, kitchens, training and education, engineering and healthcare, which will be handed over to the strategic investor,” Mr Sukhera said, adding that the non-core business, such as real estate and hotels would not be handed over to a strategic partner.
The plan to split and sell-off PIA is not new. Two years ago, Privatization Minister Mr. Mohammad Zubair revealed in an interview that the airline will be spun off as a separate entity and PIA’s other interests – such as ground-handling, catering, hotels and even a poultry business – would go into a holding company that would be retained by the state.
To avoid mass layoffs that would run into political opposition the holding company would absorb all the employees, keep a share in the airline to earn dividend income and then sell off each of its interests individually over time.
At that time the potential buyer for PIA was not disclosed but Mr. Zubair mentioned Emirates Airline, Etihad and Qatar Airways – the Gulf giants that dominate the regional sector – as potential candidates.