ISLAMABAD – Fauji Fertilizer Company (FFC) decided to join Arif Habib Consortium, strengthening the group that has secured control of the national airline in a historic Rs135 billion deal. The move is being seen as a major vote of confidence in PIA’s revival and one of the most powerful corporate alliances formed around a state asset in recent years.
Arif Habib Group Chairman Arif Habib confirmed that the consortium welcomes Fauji Fertilizer’s inclusion, announcing an ambitious turnaround plan that includes Rs125 billion in fresh investment within one year. He said the group aims to provide a strong professional platform for PIA employees, expand the fleet from 18 operational aircraft to 62, and make passenger comfort and service quality the airline’s top priority.
The development follows successful conclusion of PIA’s high-stakes privatization auction, which was broadcast live nationwide. The Arif Habib Consortium emerged victorious after intense open bidding against the Lucky Consortium, placing a final bid of Rs135 billion in the 12th round, narrowly beating Lucky Group’s Rs134 billion offer. The government’s reference price for the sale had been set at Rs100 billion, making the final outcome a major success for the privatization process.
Under the agreement, Arif Habib Consortium has acquired 75% shares of PIA, with the option to purchase the remaining 25% stake within 90 days. The payment structure requires two-thirds of the amount to be paid within 90 days, while the remaining sum can be settled within a year. Importantly, only 7.5% of the proceeds will go directly to the government, while the bulk of the funds will be reinvested into PIA, focusing on fleet expansion, operational improvements, and service upgrades.
Arif Habib Consortium includes Arif Habib Limited, Fatima Fertilizer, City School, and Lake City Holdings, and the entry of Fauji Fertilizer—which had earlier qualified for bidding but chose not to participate in the final auction—has added significant financial strength and credibility. Under the privatization framework, the winning bidder is allowed to induct new partners before final payment, provided those entities did not take part in the bidding stage.
PIA’s renewed investor appeal marks a sharp contrast to last year, when privatization efforts failed due to weak bids. Over the past year, the government transferred more than Rs650 billion in PIA’s liabilities to a holding company, turning the airline’s negative equity of Rs45 billion into positive equity of around Rs30 billion. Additional incentives, including exemptions on 18% GST for leased aircraft and the transfer of certain tax liabilities, further improved the airline’s financial profile.
As a result of these measures, PIA reported a significant turnaround in 2024, posting Rs9.3 billion in operating profit and Rs26.2 billion in net profit, compared to a Rs75 billion loss in 2023. The airline’s operating margin exceeded 12%, comparable to some of the world’s best-performing carriers. Audited financial statements showed earnings of Rs5.01 per share for the year ending December 2024, although experts caution that profitability followed the government’s assumption of massive debt and interest obligations.
PIA currently operates 18 aircraft out of a total fleet of 38 and holds landing rights at 78 international airports, including key destinations in Europe and Canada, though flights to the United States remain restricted. High-value assets such as the Roosevelt Hotel in New York and the Scribe Hotel in Paris are not part of the transaction, while the deal covers PIA’s core aviation operations, including passenger, cargo, kitchen, and training services.
Employee concerns have also been addressed, with the government guaranteeing job protection for one year after privatization. Existing staff will continue to receive salaries and benefits during this period, while large-scale layoffs are not expected. Pensions, medical benefits, and concessionary travel for retired employees will be handled by the PIA Holding Company.
Arif Habib Consortium acquires 75pc of PIA in Landmark Rs135 Billion Bid
