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Economic Diplomacy/Sole 24 Ore – Pakistan: Government launches airline privatisation

Pakistan: Government launches airline privatisation

The Pakistani government formally announced its decision to proceed with the partial privatisation of Pakistan International Airlines (PIA), with a 26% share to be offered to private interests. Despite criticism of the decision by the two main opposition parties — the Pakistan People’s Party (PPP) and the Pakistan Tehreek-i-Insaf (PTI)— Prime Minister Sharif underscored that it was necessary to intervene in order to put an end to current losses that amount to 3.3 million rupees a month (approx. €23.5 million). Premier Sharif stated that the procedure would be centred on criteria of transparency and respect for the laws in force, with which the Ministry of Privatization and the Civil Aviation Authority — the principal actors involved — would scrupulously comply.

He also urged the company’s management to “reverse” the negative performance of recent years in terms of service standards, punctuality and fleet maintenance levels that has resulted in banning on PIA flights in EU airspace on more than one occasion (currently lifted but only for aircraft of the latest generation.

The Pakistani government is also planning other privatisations, such as the State railways and the State steel sector, with the goal of meeting the parameters if a new programme stipulated with the IMF for funding of 6.7 billion USD, in accordance also with the more “liberal” economic agenda announced during the recent electoral campaign. The new agenda envisages public spending and economic recovery as top priorities. The greatest resistance to the privatization process is coming from the Pakistani bureaucracy fueled by fears of jobs cuts.


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