Pakistan approves plan to sell PIA airline on eve of election

Pakistan’s caretaker cabinet approved a privatisation plan for loss-making Pakistan International Airlines on Tuesday, days after the country’s election panel directed it to refrain from making any final deal.

The cabinet’s approval is a crucial pre-requisite to taking the airline to market for a sale, which the election panel said should be put on hold until it has reviewed the plan.

However, the interim government has recently sealed the plan to put the national carrier up for sale, Reuters reported last week.

“These steps will help attract the investors toward PIA,” the prime minister’s office said in a statement, adding that the transaction adviser Ernst & Young had completed a plan for the financial restructuring of the loss-making airline.

The plan to tie an incoming government’s hands on privatisation underscores the economic challenges a new administration will face under tough conditions imposed by an International Monetary Fund bailout, with the South Asian nation of 241 million people reeling from decades-high inflation.

The cabinet gave its approval on the recommendation of Pakistan’s privatisation commission, a body assigned to sell off all loss-making state-owned enterprises (SOEs).