Pakistan International Airlines (PIA) is confronting a fresh legal challenge after a constitutional petition was filed in the Islamabad High Court, questioning the legality of the airline’s ongoing privatisation. The petition seeks to halt the sale and annul the government-approved transaction finalized late last year.
The case concerns the proposed transfer of a 75 percent stake in PIA, headquartered in Islamabad, to a private consortium. The legal action comes as the government moves forward with what it describes as a landmark reform aimed at reviving the financially troubled national carrier and ensuring long-term operational sustainability.
The Cabinet Committee on Privatisation approved a Rs135 billion bid from a consortium led by the Arif Habib Group for a controlling stake in the airline. The offer exceeded the government’s reference price of Rs115 billion by nearly 35 percent, making it the highest bid in the process.
In addition to the acquisition cost, the consortium has committed to investing between Rs80 billion and Rs125 billion into PIA. These funds are earmarked for fleet modernisation, balance sheet strengthening, and operational restructuring—measures the government considers critical for restoring the airline’s competitiveness and reliability.
The transaction was formally concluded on December 23, 2025, following an Expression of Interest issued on May 7, 2025. Officials have maintained that the sale structure aims to safeguard investor confidence while enabling the state to exit direct airline management.
The petition, filed by Advocate Nabeel Javed Kahloon, contends that the privatisation violates the Pakistan International Airlines Corporation (Conversion) Act, 2016. He argues that PIA qualifies as a trans-provincial institution listed under the Federal Legislative List, Part II, and that any decision to privatise such an entity requires approval from the Council of Common Interests under Article 154 of the Constitution—a step, he claims, that was not taken.
The petition also asserts that Parliament did not authorise the sale and that Sections 3 and 4 of the 2016 Act mandate that any restructuring or asset transfer remain within government-controlled entities. On this basis, the petitioner maintains that the cabinet committee’s decision exceeds its legal authority.
Advocate Kahloon further disputes the government’s financial justification for the privatisation, arguing that claims of PIA being a persistent fiscal burden are misleading. He notes that the airline has not received regular government grants or subsidies, and that its financial challenges primarily stem from debt servicing, governance lapses, and policy decisions, rather than operational losses.
The petition also contests assertions that PIA’s valuation is substantially below its accumulated losses of around Rs800 billion. It alleges misuse of authority, lack of transparency, and arbitrary decision-making in the sale process. Additionally, the filing challenges a December 2023 amendment to the Privatisation Commission Ordinance, arguing that the clause limiting high court jurisdiction does not apply to constitutional matters.
The petitioner has asked the court to declare the December 23, 2025, sale agreement null and void and to suspend all actions related to the May 2025 Expression of Interest.