Pakistan To auction debt-hit national airlines to meet IMF bailout terms
Pakistan is moving ahead with plans to privatise its loss-ridden national flag carrier Pakistan International Airlines (PIA), with a public auction scheduled for 23 December 2025. a make-or-break step for the country’s ongoing $7 billion bailout programme with the International Monetary Fund (IMF).
According to a report by Geo TV, the auction will be broadcast live as the government prepares to sell between 51% and 100% of PIA’s shares, handing full management control to the winning bidder. Senior officials describe the sale as the “final and most critical” structural benchmark under the IMF’s Extended Fund Facility (EFF), which aims to pull Pakistan back from chronic fiscal instability.
The IMF Executive Board is expected to meet on 8 December to approve the next $1.2 billion disbursement — comprising $1 billion under the EFF and an additional $200 million tied to a climate-linked financing mechanism. IMF approval, however, is contingent on Islamabad demonstrating irreversible progress toward PIA’s privatisation, a condition Pakistan must fulfil by the end of the year to secure future loan tranches.
PIA, burdened with mounting debts, operational inefficiencies and safety concerns, has long been one of Pakistan’s most troubled state-owned enterprises. The airline’s liabilities have ballooned to billions of dollars, forcing the government to inject fresh funds repeatedly just to keep operations afloat.
Officials familiar with the process say several regional and international aviation groups have shown preliminary interest, though the government has yet to disclose the names of potential bidders. The auction is expected to include airline assets, international routes and key landing rights, making it one of the largest privatisation efforts in Pakistan’s history.
The interim administration has already undertaken cost-cutting measures at PIA, grounding older aircraft, trimming staff and restructuring debt in an attempt to make the carrier more attractive to buyers.
With soaring external debt, sluggish growth and limited fiscal space, Pakistan’s compliance with IMF conditions has become essential to averting another balance-of-payments crisis. The upcoming PIA sale — seen domestically as politically sensitive but economically unavoidable — is likely to shape the next phase of Pakistan’s economic recovery efforts.
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