- Federal govt says it will not fund PIA aircraft.
- Schehzad rejects claims of hidden PIA subsidy.
- PIA privatised after Rs135 billion winning bid.
Finance Minister Muhammad Aurangzeb discussed potential US Export-Import (Exim) Bank financing for Boeing aircraft for privatised PIA, refinery upgrades and Reko Diq, a copper and gold mining project in Balochistan, his adviser Khurram Schehzad said in a post on X on Sunday.
Schehzad said the government was helping Pakistan International Airlines (PIA) access financing and suppliers, but was not buying aircraft and had announced no sovereign guarantee or taxpayer-funded loan.
The national airline was privatised after an Arif Habib-led consortium won a 75% stake in the national flag carrier with a Rs135 billion bid at an auction held on December 23, 2025. The bid was above the government’s reference price of Rs100 billion.
The transaction documents were signed on January 29, 2026, while management control of PIA was transferred to the investor consortium following the first financial closing on June 29, 2026.
The consortium committed a total investment of Rs180 billion, including Rs55 billion for the government and Rs125 billion in fresh investment in PIA.
Schehzad’s clarification came after Aurangzeb’s meeting with US Exim Bank Chairman John Jovanovich in New York, where the two sides discussed potential financing for PIA aircraft, refinery upgrades and the Reko Diq mining project.
Aurangzeb outlined PIA’s interest in Boeing aircraft, particularly 787 Dreamliners, and sought support for a financing package covering aircraft and engines. He also raised the need for spare parts to help return grounded Boeing 777 aircraft to service, the Ministry of Finance said.
Schehzad wrote on X that US Exim’s mandate, like that of export credit agencies elsewhere, was to support US exports and jobs. Boeing aircraft, he noted, were US exports, and US Exim provides financing support to foreign purchasers of US-manufactured aircraft, including airlines.
US Exim could secure financing against the aircraft and assess the airline or lessee’s creditworthiness, he said, so a sovereign guarantee was not automatic, he added.
The adviser said the government’s role was to facilitate access to international financing, technology and suppliers rather than directly finance PIA.
He said Aurangzeb’s engagement with US Exim was not confined to PIA, but covered potential financing across aviation, refinery upgrades and Reko Diq as part of broader Pakistan-US economic engagement.
Schehzad also rejected descriptions of the potential arrangement as a “public loan”, “hidden subsidy” or “state backstop”, saying no such arrangement had been announced.
“The official statement refers to potential US Exim financing support; it does not announce government borrowing for PIA or a sovereign guarantee,” he said.
He said the government’s approach was consistent with its policy of reducing the state’s role in commercial activity and creating greater space for private capital, adding that privatisation transfers ownership and commercial management but does not prevent the government from facilitating access to international financing and business opportunities.
2026-09-28 10:57:00
