Islamabad International Airport will be outsourced through open bidding after PIA’s sale, with Karachi and Lahore airports to follow in phases as investor interest grows.
Islamabad Airport to Be Outsourced Through Open Bidding
The federal government has declared the outsourcing of Islamabad International Airport a priority project following the sale of Pakistan International Airlines (PIA). Briefing a parliamentary committee, officials confirmed that the airport will be outsourced through an open and competitive bidding process, rather than through government-to-government arrangements. A financial adviser is being appointed to structure the transaction, prepare the documentation and manage the bidding phase from start to finish.
Secretary Privatization Commission told lawmakers that several countries and companies, including investors from Saudi Arabia, the United Arab Emirates and Turkey, have already expressed interest in taking over the airport’s operations. However, the government has decided that the management contract will be awarded only to the bidder offering the highest value and best overall terms in an open contest, in line with its broader privatization and transparency agenda.
Karachi and Lahore Airports Next in Phased Outsourcing Plan
Officials further briefed the committee that the long-term plan is not limited to Islamabad alone. The government intends to outsource Karachi and Lahore airports in phases after Islamabad International Airport moves into private management. Once the three largest airports are outsourced, existing staff posted at major hubs will be redeployed to smaller airports across the country to strengthen operations there.
The Secretary noted that operational issues at large airports have been affecting the passenger experience for years. In the case of Islamabad, travellers have faced delays of up to one hour simply to enter the terminal at peak times. Committee Chairman Senator Afnan Ullah Khan remarked that either Islamabad Airport should be fully privatized or its facilities and services should be urgently upgraded. He also pointed to serious infrastructure and hygiene concerns at Karachi Airport that require immediate attention.
Outsourcing to Help CAA Focus on Smaller Airports
According to the briefing, outsourcing large airports is expected to free up resources for the Civil Aviation Authority (CAA). Once private operators take over day-to-day management of major hubs, the CAA will be able to focus more on regulatory oversight and on improving infrastructure and services at smaller airports. This could help revive routes to underserved cities and improve safety, capacity and efficiency at regional facilities.
Officials added that the Asian Development Bank (ADB) has also shown interest in supporting Pakistan’s airport outsourcing programme. The government had previously explored government-to-government models for airport management, but no binding agreements were finalised. As a result, all three major airports have now been formally included in the Privatisation Programme, to be pursued through competitive, market-based processes.
Investor Interest Surges After PIA Privatization
Officials told the committee that investor interest in airport outsourcing has grown significantly after progress on PIA’s privatisation. The government currently retains 25 percent of PIA’s shares, valued at around Rs 45 billion. The Arif Habib-led consortium, which has hired a US-based aviation consultancy firm, plans to invest approximately Rs 125 billion into the airline as part of its turnaround strategy.
According to the Secretary, the consortium is expected to deposit Rs 10 billion with the government within three months. PIA’s financial close is also targeted within the same period, while a detailed business plan is due within one month. Once financial close is achieved and fresh investment flows in, PIA’s valuation is anticipated to rise sharply to about Rs 180 billion, compared with the current valuation of just Rs 9 billion.
From Avoiding a Shutdown to Planning Future Growth
The committee was informed that shutting down PIA would have cost the government nearly Rs 300 billion, taking into account its liabilities and around Rs 34 billion in pension payments owed to retirees. Instead of opting for closure, the government chose the privatisation route to protect jobs, safeguard national aviation capacity and unlock new investment from the private sector.
Looking ahead, officials said that PIA’s fleet is planned to expand to 40 aircraft over the next four years as part of the post-privatisation business plan. Combined with the outsourcing of Islamabad, Karachi and Lahore airports, policymakers believe these moves can help modernise Pakistan’s aviation sector, improve the passenger experience and reduce the financial burden of loss-making state assets on the national exchequer.
