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A consortium led by a Karachi-based securities brokerage has won an auction for a majority stake in Pakistan’s state carrier with a $482mn bid, fulfilling a three-decade-long campaign to privatise the debt-laden airline.

Arif Habib Limited purchased a 75 per cent stake in Pakistan International Airlines on Tuesday in a televised auction, marking a victory for Prime Minister Shehbaz Sharif’s government and its privatisation drive.

Pakistan started a $7bn IMF programme in July 2024 and has since raised gas and electricity prices, as well as taxes, which has sparked protests. Islamabad has pledged to divest from dozens of state-run enterprises as part of the IMF programme.

“This is a very carefully curated process that has yielded a truly fair outcome,” said Mosharraf Zaidi, a spokesperson for Sharif. “It has the potential to set the table for a long run of similar transactions and inject an unprecedented new energy into the private sector.”

Three bidders participated in the auction, which was the second public attempt at selling the lossmaking airline after a failed process last year drew only a single bid that was far below the asking price of Rs100bn ($357mn) for the stake. The deal needs final regulatory approvals.

To attract new investors, the government spent months restructuring PIA’s debts, approving tax exemptions for new aircraft purchases and offering legal protections.

The consortium will acquire a majority stake in the company with the option of buying the remaining 25 per cent in three months. More than 90 per cent of the proceeds will be invested in the airline while the rest will go towards helping pay down debt, according to Topline Securities, a Karachi-based brokerage.

The government estimates that PIA loses Rs35bn annually. Before the auction, it transferred Rs670bn of its more than Rs800bn in debt to a holding company to be serviced by the government.

PIA recorded a pre-tax profit of Rs11.5bn in the first half of 2025, which analysts said was due to Islamabad’s decision to assume the bulk of its legacy debts.

The airline’s value was also boosted by recent approvals in the EU and UK to resume flights on its most lucrative routes. It had been banned from flying to those markets in 2020 after a PIA plane crashed in Karachi.

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The Arif Habib-led consortium, which includes one of Pakistan’s largest fertiliser companies Fatima Fertilizer and conglomerate AKD Group, won the bidding contest against a rival consortium led by cement giant Lucky Cement. Airblue, a local airline, also submitted a bid of Rs26.5bn.

Arif Habib, chief executive of AHL, is one of Pakistan’s leading businessmen, with a large portfolio spanning asset management, fertilisers, steel and real estate.

“Getting the deal done is a tick in the box for the government. Whether it is a good price depends on how many of PIA’s debt and liabilities have been transferred,” said Hasnain Malik, head of equity research at emerging markets consultancy Tellimer.

“One of the key issues for Arif Habib will be what sort of flexibility they have in restructuring labour and other operating costs and what the cost of funding will be to modernise the fleet of aircraft.”