The PIA privatisation efforts are back, and the chances of the deal moving forward this time are high. The previous round was spearheaded by the political leadership of the ruling party, PML-N, but now the establishment is in control. In the failed attempt, multiple conditions were demanded by potential bidders, and a few of them are now being addressed. These, along with the opening of the European route, are encouraging investors to seriously consider buying an ailing airline.

The success of PIA’s privatization hinges on the financial structure of the deal. The government should not prioritize generating immediate revenue through the sale but rather focus on long-term cash flows. The goal is to offload a bleeding asset so the fiscally strained government no longer has to subsidise it. If the privatized entity becomes profitable or expands its business, the government will benefit through tax revenues. Additionally, there could be forex savings if PIA captures business from foreign airlines.

At present, two consortiums of reputable local business groups are showing strong interest. One consists of several IPP owners, including those who faced tough negotiations recently.

The other group, referred to as the Pakistan Corporate Consortium, comprises members from across the country, including top exporters who did not participate in the previous round. This consortium is led by Bashir Janmohammad, with Arif Habib also playing a role.

The inclusion of the Fauji Foundation brings diversification and versatility, which are essential.