PIA may head for privatisation: reports

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Pakistan International Airlines (PIA) could be partially privatised as part of a wide-sweeping overhaul of the country's civil aviation industry.

Media reports quoting the prime minister's aviation advisor Shujaat Azeem say that he will likely recommend strategic investors be brought in to turn around financially-crippled flag-carrier PIA.

"In my humble opinion, the government can't effectively manage the PIA affairs without privatising it. We can't rely on heavy bailout packages forever," he said in an interview with a local newspaper.

Azeem has been tasked with completing a review of the country's commercial aviation industry that will deliver a new national aviation policy.

The new policy could also result in changes to the civil aviation authority, such as reducing its role in developing airports. He did not, however, say if there may also be changes for the country's privately-owned carriers such as Shaheen Air and Airblue.

Azeem adds that before inviting investors to take up shares in PIA that the airline would need to "stand on its feet because no one would want to buy the shares of a loss-making entity."

A spokesman for PIA told Flightglobal Pro that the airline has not made any preparations for a possible privatisation.

"At the moment more energies are focused towards rebuilding rather than an outright privatisation," he says.

PIA has been taking steps to stem its losses, including closing a number of offices in offline markets. It will also suspend services to Amsterdam and Frankfurt from September.

Further savings are expected to flow through a fleet renewal. PIA recently issued tenders seeking to lease new 140 and 200 seat aircraft after a previous deal with BOC Aviation to lease five Airbus A320s fell through after it failed to raise the finance required.

The spokesman also noted that the flag-carrier has received a Pakistan rupee (PRs) 7 billion ($69.5 million) bailout from the government that has been used to cover maintenance costs and the acquisition of spares.

Flightglobal's Ascend Online Fleets database shows that PIA operates a fleet of 29 aircraft with an average age of 16 years. It also has six other aircraft in storage and orders for five Boeing 777-300ERs.