Pakistan International Airlines (PIA) has reported a rare financial turnaround, posting a pre-tax profit for the first half of 2025—the first time the carrier has been in the black since 2004.
The state-owned airline, now operating under PIA Holding Company, booked Rs. 11.5 billion ($40.6 million) in pre-tax earnings and Rs. 6.8 billion in net profit for the six months ending June. The figures stand in stark contrast to the losses recorded during the same period last year.
Debt Relief Fuels Recovery
PIA’s return to profitability was less about a surge in revenue and more about a dramatic cut in financing costs. In 2024, the government assumed nearly 80% of the airline’s massive debt burden, easing the pressure of repayments that had long crippled operations.
Despite the profit, the airline’s balance sheet still tells a story of strain. Its equity remains negative, weighed down by expensive fuel bills and operating costs, underscoring how fragile the recovery is.
Timing Critical as Sale Approaches
The turnaround could not have come at a more pivotal moment. Under the terms of a $7 billion IMF bailout, Pakistan is moving ahead with plans to privatize PIA—its first major sell-off of a state-owned company in almost 20 years.
An earlier attempt to sell the airline last year fell apart after a disappointing single bid. This time, however, interest appears stronger, with domestic players such as Airblue, Lucky Cement, Arif Habib Group, and Fauji Fertiliser among those eyeing the carrier. Final offers are expected in the coming months.
Return to UK Routes Boosts Prospects
Adding to the improved outlook, the United Kingdom lifted its five-year ban on Pakistani airlines in July. The prohibition, imposed after a 2020 plane crash and revelations of pilot licensing irregularities, had cost PIA an estimated Rs. 40 billion annually in lost revenue from lucrative routes to London, Manchester, and Birmingham.
With access to UK skies restored and European restrictions eased late last year, PIA now has the chance to regain one of its most profitable international markets—an opportunity that could significantly raise its value ahead of privatization.