Plan to Privatize PIA Before General Elections to be Presented at Cabinet Meeting

[Abbas Ali]

According to Privatization Minister Daniyal Aziz, plan to privatize PIA has been prepared and will be presented at cabinet meeting.

Efforts will be made to privatize PIA before next general elections due to be held this year.

Abbas

[Abbas Ali]

Pakistan aims to sell national airline before election

Drazen Jorgic

ISLAMABAD (Reuters) - Pakistan will try to privatize its national airline before general elections due this year, privatization minister Daniyal Aziz said, as the ruling party seeks to restart sales of state-run businesses.

Pakistan International Airlines(PIA), hemorrhaging money and losing market share to Gulf-based rivals such as Etihad and Emirates, has been hit by management turmoil in recent years and a 2016 plane crash that led to 47 deaths.

The privatization of loss-making entities that were draining the exchequer was a key priority for the Pakistan Muslim League-Nawaz (PML-N) party when it swept to power in 2013.

PIA was among 68 state-owned companies earmaked for privatization in return for a $6.7 billion International Monetary Fund package that helped Pakistan to stave off a default in 2013.

Despite some initial success, the process stalled in 2016 after staff protests caused havoc with PIA operations and the government passed a law that effectively made it impossible to privatize the airline.

But Aziz, chairman of the Privatisation Commission, told Reuters that new plans have been drawn up to sell off PIA and he would take the proposals to the cabinet committee on privatization, chaired by Prime Minister Shahid Khaqan Abbasi.

“Next step would be going to the cabinet committee ... and that’s imminent, maybe even next week,” Aziz said in his Islamabad office this week.

The new plans focus on splitting up the carrier, with the core airline business being separated from vast peripheral operations such as catering, hotels and maintenance, Aziz said. The core airline would then be sold.

HEAVY LOSSES

But to complete the transaction, Aziz said, the government would have to pass laws in parliament to reverse the 2016 legislation that converted PIA into a limited company and effectively barred the government from giving up management control.

The impetus to sell PIA has grown as the airline has piled up huge losses estimated by its former CEO in March at about $30 million a month. Total debt stood at 186 billion rupees ($1.8 billion) at the end of 2016.

When asked how soon could a buyer could acquire PIA, Aziz said: “Tomorrow morning. If you have the money, come and buy it.”

Aziz gave no indication of an expected valuation.

Both Emirates and Etihad had shown interest in buying PIA before the government backed down from privatization in 2016, the English-language Express Tribune newspaper reported, citing an unnamed official.

Analysts have been skeptical about the government’s ability, or willingness, to take on powerful unions and embark on a privatization process so close to general elections likely in July or August.

Aziz said that, owing to time restraints ahead of the elections, the privatization commission will focus on one state company per sector, including a bank and an energy company.

He added that there has been “huge interest” in buying Pakistan Steel Mills, once the pride of Pakistan’s industrial output but now shut and bleeding cash.

“We will get runs on the board, but the real challenge is to bring to fruition the two big animals: one is PIA and the other one is Steel Mills,” Aziz said.

Reporting by Drazen Jorgic; Editing by David Goodman

Source: reuters.com

[Mansoor Mela]

He is a joker.

[Sadiq]

Impossible task. If undertaken with all sincerity it requires two years to achieve

[Abbas Ali]

PIA officers in Karachi have begun protest against planned privatization of the airline.

Abbas

[ammad]

Very bad decision specially with respect of timings. Government first should have to privatize very loss making and inefficient 13 power distribution companies like Hesco, Lesco and so on.

EK and EY would definitely would like to buy PIA because of many reasons but PIA should come out of miseries by herself.

On the side note i just flew SFO to KHI via Turkish and flight was code shared with PIA, and for the first time i have seen proper marketing and display of code share information by TK for PIA. Meaning at boarding gates PIA name were displayed and in my opinion, PIA - TK have lot more potential and did notice that TK departure time from IST for KHI, LHE and ISB is with in 15 minute time window at 9:15 pm of local time.

What PIA could do is that to add daily morning flight from IST to KHI, LHE and ISB in order to lure passengers currently travel with ME3.

Abbas: i sent you some pictures at historyofpia@yahoo. If you get chance please upload it.

[Abbas Ali]

^ Thank you Ammad for the photos

Here they are:


PIA flight PK-5080 from San Francisco (SFO) to Istanbul (IST) operated by Turkish Airlines Boeing 777-300ER aircraft as flight TK-80.

https://www.flightradar24.com/data/flights/tk80


PIA flight PK-5079 from Istanbul (IST) to San Francisco (SFO) operated by Turkish Airlines Boeing 777-300ER aircraft as flight TK-79.

https://www.flightradar24.com/data/flights/tk79


Turkish Airlines Istanbul (IST) to San Francisco (SFO) Boeing 777-300ER flight TK-79.

Abbas

[Abbas Ali]

Privatization Minister Daniyal Aziz in a press briefing at Press Information Department (PID) in Islamabad said:

* Every government in recent times has worked on PIA privatization since the beginning of privatization process in the country.

* Many airlines formed in recent times around the world are now well ahead of PIA in terms of service/rating/ranking.

* Privately-owned airlines are competitive.

* State-owned organizations in Pakistan are suffering total loss of more than 600 billion rupees annually. PIA is one of them.

* State-owned airlines struggle and suffer losses.

* Sinking organizations cannot be saved without foreign investment. Foreign investment is necessary for introducing new technologies.

* Loss-making state-owned organizations suck in taxpayer's money.

* Government respects PIA employees and their legal rights will be protected.

* Bill for PIA privatization was passed in the parliament on April 15, 2016. The bill was passed with inclusion of inputs/suggestions by various political parties of the country. There's two-year validity period for the start/completion of PIA privatization process. That validity period is ending in April 2018 and the government intends to start PIA privatization process before the end of that validity period.

* PIA assets like hotels are not part of the privatization process. PIA properties (offices, apartments, farms, medical centres) are in cities including Tashkent, Mumbai and Amsterdam.

* PIA will be divided into companies. The company with core airline business will be offered for sale. The other company will have legacy liabilities of PIA.

* Government will take over more than 325 billion rupees PIA loans.

Abbas

[Abbas Ali]

According to news sources, the PIA privatization bill/act passed in 2016 does not allow more than 49 percent of airline's shares for the strategic investor.

Legislation is required to make change in that clause to make airline's privatization process attractive for investors.

Abbas

[Abbas Ali]

Pakistan Peoples Party (PPP) is going to oppose the privatization of PIA, according to news reports.

Abbas

[arshad.altaf]

PIA's core business to be sold off by April 15: privatisation minister
https://www.dawn.com/news/1383115/pias- ... n-minister

Privatising PIA
https://www.dawn.com/news/1383164/privatising-pia

THE EXPRESS TRIBUNE > BUSINESS
PIA’s core functions to be carved out as govt looks to sell stake
https://tribune.com.pk/story/1609616/2- ... ell-stake/

[Mansoor Mela]

Are Emirates, Etihad and Qatari privately owned or state owned?

[Sadiq]

PIA has tried all options to resuscitate the airline including hi ring of foreign management consultants, local experts on market based salaries, but none of it worked. As a last option option of privitization be also implemented to see if foreign airlines can turn around. One thing is certain that without massive investments the airline cannot be turned around.

[Abbas Ali]

PIA employees/officers/unions meeting in Peshawar today will discuss the future line of actions against airline's privatization.

Protest by employees at airline's offices around the world and suspension of domestic & international flights being considered.

In the first stage of protest, the employees will start wearing black arm bands from today.

Pakistan Essential Services Act is invoked to prevent PIA employees from going on strike.

Info source: https://www.express.com.pk/epaper/PoPup ... e=20180117

Abbas

[Silent.93]

Emirates says no plans to acquire Pakistan's struggling airline

http://www.arabianbusiness.com/transpor ... Cduw%3D%3D