Fauji Fertilizer Company Ltd. (FFC), a flagship enterprise of the Pakistan army-run Fauji Foundation, announced that its board has approved submitting an expression of interest (EOI) to acquire a stake in the national flag carrier Pakistan International Airlines (PIA). The disclosure was made in a filing to the Pakistan Stock Exchange (PSX) on June 17.
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The move comes amid Islamabad’s efforts to privatize 51-100 percent of PIA under a \$7 billion International Monetary Fund (IMF) reform program targeting the overhaul of state-owned enterprises. The government recently extended the deadline for submitting EOIs to June 19, aiming to attract more qualified bidders after a failed attempt earlier this year.
“The board has approved submission of an expression of interest and pre-qualification documents to the Privatization Commission . and undertaking a comprehensive due-diligence exercise,” FFC stated in the PSX filing.
As Pakistan’s largest fertilizer producer with diversified investments in energy, food, and financial sectors, FFC’s potential entry into aviation would significantly broaden the Fauji Foundation’s commercial portfolio. However, any acquisition will depend on the outcomes of the due diligence process, regulatory approvals, and final terms set by the government.
This marks Pakistan’s second major attempt to privatize the loss-making airline. A 2024 auction attracted only a single bid from Blue World City, offering Rs10 billion (\$36 million) for a 60 percent stake—far below the Rs85 billion (\$305 million) reserve price—leading to its rejection.
To make the airline more attractive for investors, the government removed nearly 80 percent of PIA’s legacy debt from its books and absorbed it into public debt, while also restructuring the remaining liabilities. These financial reforms were complemented by operational changes, including workforce reductions, route rationalization, and aggressive cost controls.
In a major turnaround, PIA reported an operating profit of Rs9.3 billion (\$33.1 million) in 2024—its first in over two decades—marking a key milestone ahead of the privatization effort. The airline, which has long relied on government bailouts, had previously been plagued by impounded aircraft and canceled flights due to unpaid fuel bills and maintenance costs.
Despite a fleet of 34 aircraft, PIA currently holds just 23 percent of the domestic aviation market. In contrast, Middle Eastern carriers dominate approximately 60 percent of Pakistan’s international traffic, offering more competitive route networks and direct services.
The potential entry of FFC into the aviation sector could represent a strategic shift in Pakistan’s commercial aviation landscape, adding new momentum to the government’s privatization agenda.
