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Pakistan Airlines Records First Annual Profit in Over 20 Years

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For the first time in over two decades, Pakistan International Airlines (PIA) has reported an annual profit, just as the government prepares for a second attempt to privatize the airline. The announcement was made by the Defense and Aviation Minister, Khawaja Muhammad Asif, during a PIA board meeting.

According to the minister, the fiscal year 2024 accounts were officially approved, showing an operating profit of 9.3 billion Pakistani rupees (equivalent to $33.14 million) and a net profit of 26.2 billion rupees after an accounting adjustment for deferred taxes.

Deep Reforms and Debt Relief: Keys to the Turnaround

Prime Minister Shehbaz Sharif celebrated the results, calling it a “major turnaround after decades of losses” in a post on social media platform X. He also expressed optimism for the company’s future: “The skies ahead look clearer, God willing.”

This recovery was no accident. Over the past year, the Pakistani government took drastic measures to prepare the airline for sale. A previous privatization attempt in 2023 failed, receiving only one bid that fell far short of the minimum asking price of over $300 million.

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To make PIA more attractive to investors, Islamabad absorbed nearly 80% of the airline’s historic debt, transferring it to state accounts. After the failed sale attempt, the remaining debt was also removed from PIA’s books, as reported by the country’s Privatization Ministry.

Cuts and Operational Optimization

For years, PIA relied on state bailouts to stay afloat, as its operating income was consumed by debt payments. This dynamic changed thanks to a package of structural reforms: staff reductions, elimination of unprofitable routes, and cuts in operational expenses.

These measures not only reduced costs but also averted a potential shutdown. Before the 2023 privatization attempt, the airline faced real threats of closure. Some of its aircraft were seized at international airports due to unpaid debts, and several flights were canceled due to a lack of funds for fuel and spare parts.

A Second Chance on the Horizon

With its finances now in the black and its structure streamlined, PIA is gearing up for another privatization attempt. This time, the scenario is more favorable: a leaner, debt-free company with a financial balance sheet that inspires confidence.

This historic achievement is not just a victory for the airline but also a signal to potential buyers that the restructuring is serious. The challenge now will be to capitalize on this momentum before internal or external turbulence grounds its flight once again.

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