The national flag carrier, Pakistan International Airlines (PIA), is expected to be run by a new owner from April 2026. It will also receive fresh capital under a deal to privatise the airline, the country’s privatisation chief said on Wednesday.

A consortium headed by the Arif Habib Corporation emerged as the top bidder on Tuesday, in a live-televised auction for a 75% stake in PIA. This marks a breakthrough for the government’s long-delayed privatisation of the carrier.

The consortium offered Rs135 billion, surpassing the government’s reserve price of Rs100 billion – a turnaround from last year’s failed sale attempt.

Read: Govt finally cuts loose ‘white elephant’ PIA

Adviser to the Prime Minister on Privatisation, Muhammad Ali, told Reuters in an online interview that the state expects a new owner to be running the airline by April next year. The process moves to final approvals by the Privatisation Commission board and cabinet, expected within days, with contract signing likely within two weeks.

Financial close is also expected after 90 days to meet regulatory and legal conditions.

Ali said the government would receive Rs10 billion, in cash, upfront, retaining a 25% stake valued at around Rs45 billion. The deal was structured to inject fresh capital into the airline rather than simply transfer ownership, he said.

“We did not want a situation where the government sells the airline, takes its money, and the company still collapses,” Ali said. The winning consortium also comprises fertiliser maker Fatima, private school network City School and real estate firm Lake City Holdings Limited.

Ali said Fauji Fertiliser Company, a military-run conglomerate, did not bid but could still join the winning consortium as a partner, noting the buyer can add up to two partners – including a consortium partner or a foreign airline – if they meet the qualifying criteria.

Allowing partners adds financial strength and could bring global aviation expertise, he said.

IMF pressure

Ali said safeguards, including retained earnest money and an additional payment on signing, would allow the government to move to the second-highest bidder if the deal fails to close.

On labour, he said the buyer must retain all employees for 12 months after the transaction, with contracts unchanged, adding that the PIA workforce has already shrunk in recent years.

The sale is closely watched by the International Monetary Fund (IMF), which has pressed Pakistan to halt losses at state-owned enterprises. Ali termed the privatisation a key test of Pakistan’s reform credibility with the IMF, adding that failure to offload loss-making state firms risked renewed pressure on public finances.

He said closing the deal would signal momentum on reforms and privatisations, adding that the government was working through a pipeline of future transactions once PIA closes.