Islamabad — The government on Thursday signed a transaction agreement to privatise Pakistan International Airlines (PIA), formalising the sale of the national carrier to the Arif Habib Consortium at a ceremony held in Islamabad.

The signing marks the completion of the PIA privatisation process and a key step in the government’s reform agenda for state-owned enterprises. The agreement represents one of Pakistan’s largest privatisation transactions in recent years and is aimed at improving the airline’s financial sustainability and operational performance.

The ceremony was attended by Prime Minister Shehbaz Sharif and Chief of Army Staff and Chief of Defence Forces Syed Asim Munir, along with senior government officials and representatives of the consortium. Documents related to the transaction were formally exchanged during the event.

Under the terms of the agreement, the Arif Habib Consortium will make a total investment of PKR 180 billion (approximately $650 million). Of this amount, PKR 125 billion (around $450 million) will be injected directly into PIA as growth capital, while PKR 55 billion (about $200 million) will be paid to the government.

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Officials said the capital injection will be used to support fleet expansion, service upgrades, and the introduction of private-sector management practices. The objective is to stabilise the airline’s operations, improve efficiency, and enhance the passenger experience as part of a broader restructuring effort.

Prime Minister Shehbaz Sharif said the privatisation process had been carried out in a transparent manner and expressed confidence in the consortium’s ability to manage the airline. He said passenger safety, comfort, and service quality would remain central priorities as PIA transitions under private management.

Prime Minister’s Adviser on Privatisation Muhammad Ali said the agreement reflected the government’s commitment to reforming state-owned enterprises through market-based solutions, adding that the transaction was completed following due process.

PIA, once regarded as a leading airline in the region, has faced persistent financial and operational challenges over the past decades. Government officials said the privatisation deal is expected to provide the capital, governance, and management capacity needed to place the national carrier on a more sustainable footing.