Arif Habib responds to social media reports claiming PIA sold at low price
Businessman Arif Habib has responded to widespread social media claims alleging that Pakistan International Airlines (PIA) was sold at a throwaway price following its privatisation.
The Arif Habib Group-led consortium recently acquired a 75 percent stake in the national flag carrier for Rs135 billion. Soon after the deal, commentators on social media compared the sale price to the cost of one or two commercial aircraft, claiming PIA had been undervalued.
Speaking to ARY News, Arif Habib rejected the allegations, stating that PIA’s financial position at the time of sale justified the valuation. He said the airline had zero book value, with its equity fully eroded due to years of losses.
“If you look at PIA’s balance sheet, its book value is zero. This means the company has no equity, as its liabilities are equal to its assets,” he explained.
Habib added that while PIA owns certain properties, their value had already been marked to market. He said the airline’s net asset value stood at around Rs25 billion, largely due to deferred tax assets.
According to him, PIA’s liabilities amount to approximately Rs190 billion, while its assets are valued at about Rs180 billion, leaving the airline in a financially fragile position.
Addressing concerns about future operations, Arif Habib said the new management would be forced to shut down non-profitable routes to prevent further financial losses.
“We will definitely close loss-making routes; otherwise, the capital will be exhausted again and the company will face another crisis,” he said.
However, he noted that if the government wants PIA to continue operating on unprofitable routes for strategic or public interest reasons, it would need to cover the associated losses.
Earlier, outlining plans for the airline’s revival, Arif Habib described the acquisition as a positive step for the country. He said 92 percent of the Rs135 billion bid would be injected directly into PIA, with nearly Rs125 billion allocated for operational improvement and development over the next year.
Calling the privatisation a collective success, he said the move would benefit the national economy, the government and millions of PIA passengers.
