ISLAMABAD: The Ministry of Defence on Monday informed the National Assembly that Pakistan does not follow a full “open sky policy,” having signed only a few carefully planned agreements — none since 2015.
In a written reply, the ministry stated that PIA’s market share had remained stable between 20 and 30 percent from 2015 to 2024, except during the COVID-19 pandemic. Since then, passenger numbers have generally increased, reflecting overall market growth.
The ministry said that liberal traffic rights had been granted to enhance passenger convenience, ensure competition, provide direct flights, and offer competitive fares. Responding to supplementary questions, Parliamentary Secretary for Defence Zaib Jafar told the house that the federal cabinet had formed a committee to probe losses caused by the 2020 statement of the then aviation minister in parliament.
The committee, convened by the Minister for Defence, includes the Ministers for Law and Justice, Finance and Revenue, as well as the defence secretary, law secretary, PIA CEO, and Civil Aviation Authority DG. Its terms of reference are to assess the financial losses to the exchequer caused by the minister’s statement and evaluate the reputational damage inflicted on PIA and the country.
She said that while the committee’s report was pending, the government was committed to implementing its recommendations. Zaib Jafar highlighted significant progress in PIA’s turnaround, claiming the airline had shifted from being a loss-making entity to a profitable one through debt restructuring, downsizing, and reopening long-suspended routes.
She stressed that profitability was essential to attract credible buyers before privatisation. “As a result of restructuring, PIA is now moving towards profitability,” she said, expressing confidence that the airline would be sold as a profitable entity once the bidding process begins.
The parliamentary secretary said that PIA was modernising its fleet by inducting Boeing 777s and A320s, while also reviving international routes. Currently, the airline operates 19 aircraft, including two ATRs, serving both domestic and international destinations.
She said that the privatisation process, being carried out by the Privatisation Commission, had attracted four prequalified bidders who were conducting site visits and due diligence. The deal is expected to be finalised by October.
Detailing the restructuring process, the ministry informed the house that the PIA Holding Company (PIAHCL) was incorporated on March 21, 2024. All non-core liabilities amounting to Rs628 billion and non-core assets worth Rs24.9 billion were transferred to the holding company to clean up PIA’s balance sheet.
As a result, the airline posted an operating profit of Rs9.3 billion and a net profit of Rs26 billion in 2024. Management has since focused on discipline, improved governance, aggressive marketing, closure of loss-making routes, and expansion of profitable ones.
It was further stated that PIA was expanding operations to the Middle East (UAE and Saudi Arabia) as well as to new destinations including Kuala Lumpur, Baku, and Istanbul.