Pakistan International Airlines (PIA), the national flag carrier of Pakistan, is poised for a historic transition of ownership. Following a successful bidding process in late December 2025, government officials have confirmed that operational control of the airline is expected to transfer to a private consortium by April 2026. The deal marks a pivotal moment for the aviation sector in the region, ending years of financial uncertainty for the carrier.

According to reporting by Reuters, the privatization process culminated on December 23, 2025, with a winning bid of 135 billion Pakistani rupees ($482 million) for a controlling stake. The move aligns with broader economic reforms supported by the International Monetary Fund (IMF) aimed at stabilizing the nation’s economy.

Consortium Secures Controlling Stake

The successful bid was placed by a consortium led by the Arif Habib Corporation, a major business conglomerate in Pakistan. Reports indicate that the group secured a 75% controlling stake in the airline, significantly outbidding competitors. The government of Pakistan will retain the remaining 25% shareholding.

Details summarized from regional media outlets, including Dawn News and The News International, reveal the composition of the winning consortium. Alongside Arif Habib Corporation, the group includes:

• Fauji Fertilizer Company (FFC)
• Fatima Group
• City Schools
• Lake City Holdings

The final offer of Rs 135 billion reportedly exceeded the government’s minimum reference price of Rs 100 billion. This outcome stands in stark contrast to a failed privatization attempt in 2024, which was scrapped after attracting only low-value interest.

Financial Commitments and Investment

Beyond the purchase price, the new owners have outlined substantial financial commitments to revitalize the carrier. According to the deal structure reported by local media, approximately 92.5% of the sale proceeds will be reinvested directly into PIA. Furthermore, the consortium has committed to investing between Rs 80 billion and Rs 125 billion over the next five years to modernize operations.

Timeline for Handover and Operations

The transition from state control to private management is scheduled to take approximately three months. Muhammad Ali, the Adviser to the Prime Minister on Privatisation, outlined the timeline in remarks cited by Reuters.

“The state expects a new owner to be running the airline by April.”

Muhammad Ali, via Reuters

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The timeline includes a 90-day period for financial close and regulatory compliance, with the contract signing expected in early January 2026. This period allows for the finalization of approvals from the Privatisation Commission board and the federal cabinet.

Resumption of Key Routes

In a parallel development crucial to the airline’s valuation, PIA is scheduled to resume direct flights to London Heathrow in March 2026. This follows the lifting of international bans that had previously crippled the carrier’s long-haul revenue. The restoration of these routes is expected to play a vital role in the consortium’s strategy to return the airline to profitability.

Strategic Revitalization Plans

The new ownership group faces the significant task of overhauling an airline that has struggled with aging infrastructure and financial losses. To prepare the entity for sale, the government previously assumed approximately Rs 654 billion of PIA’s liabilities, effectively cleaning the balance sheet for the new investors.

According to the privatization roadmap, the consortium plans to aggressively expand the fleet. Currently operating with approximately 18 aircraft, the new owners aim to increase the fleet size to between 62 and 64 aircraft in phases. This expansion is necessary to restore both domestic connectivity and international market share.

Regarding the workforce, the deal reportedly includes a clause requiring the retention of existing employees for at least 12 months, providing a buffer during the initial restructuring phase.

AirPro News Analysis

The successful privatization of PIA represents a critical test case for state-owned enterprise reform in South Asia. For years, PIA has been a drain on the national exchequer, with annual losses estimated at Rs 50 billion. By securing a valuation above the reference price, the government has signaled to international observers and the IMF that it is capable of executing complex structural reforms.

However, the challenge for the Arif Habib-led consortium is immense. While the government has absorbed the legacy debt, the operational challenges, ranging from fleet modernization to regaining passenger trust, require sustained capital and astute management. The immediate resumption of European routes offers a “low-hanging fruit” revenue boost, but long-term viability will depend on the consortium’s ability to compete with aggressive Gulf carriers that have long dominated Pakistan’s international traffic.

Frequently Asked Questions

Who bought Pakistan International Airlines?

A consortium led by Arif Habib Corporation, which includes Fauji Fertilizer Company, Fatima Group, City Schools, and Lake City Holdings.

How much was the winning bid?

The consortium bid Rs 135 billion ($482 million) for a 75% stake in the airline.

When will the new owners take control?

Operational control is expected to be handed over by April 2026, following a 90-day financial close period.

What happens to current employees?

The deal includes a provision protecting existing employees from layoffs for a period of 12 months.

Sources: Reuters, Dawn News, The News International, Gulf News

This article summarizes reporting by The Star.

MAG Signals Potential Sale of Firefly Amid Continued Losses

Airlines Aviation Group (MAG), the parent company of Malaysia Airlines, has publicly acknowledged that divesting its loss-making subsidiary, Firefly, remains a strategic option. According to reporting by The Star, the group has set a timeline of approximately three to four years to determine the carrier’s fate, with a final decision expected around 2028 or 2029.

The potential sale is part of considerations under MAG’s newly unveiled “Long-Term Business Plan 3.0” (LTBP3.0), which covers the period from 2026 to 2030. While the parent group has secured three consecutive years of profitability, Firefly has struggled to contribute positively to the bottom line. Group Managing Director Datuk Captain Izham Ismail confirmed on December 15, 2025, that while no immediate sale is planned, the option remains “on the table” if the subsidiary cannot turn its operations around.

The Three-Year Ultimatum

MAG leadership has indicated that Firefly is currently in a critical probationary period. Following a major operational restructuring in August 2025, the airline has been given a window to prove its financial viability. The Star reports that the group intends to monitor performance closely over the next few years before making a “drastic decision.”

This timeline coincides with the expiration of specific aircraft leases, allowing the group to potentially exit the business with lower financial penalties if the turnaround Strategy fails. The decision to wait until 2028 or 2029 suggests that MAG is willing to give the carrier one final opportunity to succeed under its new dual-hub model.

Operational Shifts: The Move from Subang

A central factor in Firefly’s recent struggles was the performance of its jet operations at Sultan Abdul Aziz Shah Airport (Subang). In August 2025, the airline moved its entire fleet of Boeing 737-800 jets from Subang to KLIA Terminal 1.

According to industry data, the jet operations at Subang suffered from operational constraints and a lack of connectivity to the wider MAG network, leading to unsustainable yields. By relocating to KLIA, Firefly now operates in direct competition with low-cost carriers, while maintaining its turboprop (ATR 72-500) fleet at Subang for short-haul regional connectivity.

Financial Divergence

The Financial-Results health of the parent company stands in stark contrast to its subsidiary. MAG reported a net profit of RM54 million for 2024 and is projected to remain profitable through 2025. However, Firefly’s net losses reportedly widened in the 2024/2025 period. Data cited in recent research reports indicates that yields dropped by approximately 19% prior to the operational shift, dragging down the group’s overall margins.

Competitive Landscape and New Entrants

The Malaysian aviation sector is facing intense competition as 2026 approaches. Firefly’s move to KLIA Terminal 1 places it in a crowded market dominated by AirAsia and Batik Air Malaysia. AirAsia continues to lead with lower unit costs, making it difficult for Firefly to compete effectively in the value segment without cannibalizing Malaysia Airlines’ premium traffic.

Furthermore, a new state-backed competitor is set to disrupt the market. AirBorneo, owned by the Sarawak state government, is scheduled to take over Rural Air Services (RAS) from MASwings on January 1, 2026. The new airline plans to launch jet operations by July 2026, introducing fresh competition in East Malaysia, a key market for Firefly.

AirPro News Analysis

The hesitation to sell Firefly immediately likely stems from the complexity of the local aviation ecosystem. Firefly occupies a difficult “middle ground,” it lacks the massive scale of AirAsia to win on pure cost, yet it cannot drift too far upmarket without confusing the brand proposition of Malaysia Airlines.

From a strategic standpoint, holding the asset until lease expiration in 2028 makes financial sense. It avoids early termination fees and provides a hedge against the new competition from AirBorneo. If the move to KLIA fails to improve yields, a sale to a private equity firm or a regional group looking for valuable slots at Subang would be the logical exit strategy. For now, MAG seems content to use Firefly as a flanker brand, but the patience of the parent company is clearly finite.

Sources

• The Star
• Malaysia Aviation Group

This article summarizes reporting by Hindustan Times.

India Grants Approval to Two New Airlines: Al Hind Air and FlyExpress

The Indian Ministry of Civil Aviation has officially granted No Objection Certificates (NOCs) to two new airline startups, Al Hind Air and FlyExpress, according to reporting by the Hindustan Times. The approvals, issued in late December 2025, mark a significant step in the government’s effort to diversify the country’s aviation sector, which is currently dominated by a few major players.

These new entrants are expected to commence operations in 2026, joining Shankh Air, another startup carrier that received its initial approvals earlier in the year. As noted in the Hindustan Times report, the entry of these carriers comes at a time when the market is heavily consolidated, with IndiGo and the Air India Group controlling the vast majority of domestic traffic.

Profiles of the New Entrants

Based on the regulatory filings and industry profiles associated with the approvals, the two new airlines are adopting distinct strategies focused on regional connectivity rather than immediately challenging legacy carriers on trunk routes.

Al Hind Air

Al Hind Air is backed by the Alhind Group, a Kerala-based travel and tourism conglomerate with a reported turnover exceeding ₹20,000 crore. According to industry data, the airline will be based at Cochin International Airport (COK) and aims to serve as a regional commuter carrier.

The airline’s initial fleet strategy reportedly involves inducting 2–3 ATR 72-600 turboprop aircraft. This choice of aircraft suggests a focus on Tier-2 and Tier-3 cities in South India, connecting Kochi with destinations such as Bengaluru, Thiruvananthapuram, Chennai, Kozhikode, and Hubballi. While the carrier plans to eventually expand into international operations with narrow-body Airbus jets, its immediate focus remains on regional connectivity.

FlyExpress

The second carrier to receive an NOC, FlyExpress, is backed by Fly Express International Courier Cargo Service. Based in Hyderabad at the Rajiv Gandhi International Airport, the airline’s background in logistics suggests a potential hybrid business model that may combine passenger services with cargo operations.

Like Al Hind Air, FlyExpress is expected to launch in 2026. While specific fleet details remain scarce, the carrier is likely to utilize smaller regional aircraft suited for short-haul routes in South-Central India.

Shankh Air and the 2026 Landscape

In addition to the two newly approved carriers, Shankh Air is preparing for a Q1 2026 launch. Unlike its regional counterparts, Shankh Air is positioning itself as a Full-Service Carrier (FSC). It will be the first scheduled airline based in Uttar Pradesh, with hubs planned for the upcoming Noida International Airport (Jewar) and Lucknow.

According to available fleet data, Shankh Air plans to operate Boeing 737-800NG aircraft, offering a two-class configuration. The airline aims to scale rapidly, targeting a fleet of 20–25 aircraft within three years to serve high-demand routes across North India.

AirPro News Analysis: Breaking the Duopoly

The approval of these three carriers highlights a strategic shift in Indian aviation. Currently, the market is characterized by a “duopoly” where IndiGo and Air India Group hold over 90% of the market share. Recent operational challenges faced by major incumbents have underscored the need for greater market stability and consumer choice.

We observe that the government is actively encouraging these new entrants through the UDAN (Ude Desh ka Aam Nagrik) scheme, which subsidizes flights to unserved airports. By establishing bases in regional hubs like Kochi, Hyderabad, and Noida, rather than the saturated Delhi and Mumbai airports, these startups are lowering their entry barriers and aligning with national connectivity goals.

Frequently Asked Questions

When will Al Hind Air and FlyExpress start flying?
Both airlines have received their No Objection Certificates (NOCs) as of December 2025 and are expected to commence flight operations in 2026 after securing their Air Operator Certificates (AOC).

What aircraft will Al Hind Air use?
Al Hind Air plans to launch with ATR 72-600 turboprop aircraft, focusing on regional routes in South India.

Is Shankh Air a budget airline?
No. Shankh Air is positioning itself as a Full-Service Carrier (FSC) with Business and Economy classes, distinguishing it from the low-cost models of Al Hind Air and FlyExpress.

Sources

• Hindustan Times