ISLAMABAD— Pakistan International Airlines (PK) is facing a fresh legal challenge after a constitutional petition was filed in the Islamabad High Court questioning the legality of its ongoing privatisation process. The petition seeks to block the sale of the national carrier and overturn the government-approved transaction finalized late last year.
The case relates to the proposed transfer of a 75 percent stake in Pakistan International Airlines, headquartered in Islamabad, to a private consortium. The legal action comes as the government moves forward with what it describes as a cornerstone reform of the loss-making airline, aimed at long-term financial and operational recovery.
Pakistan Airlines Privatisation Challenged
The Cabinet Committee on Privatisation approved a Rs135 billion bid submitted by 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 roughly 35 percent, positioning it as the highest and winning bid in the process.
In addition to the acquisition price, the consortium committed to injecting between Rs80 billion and Rs125 billion into the airline.
These funds are intended for fleet modernisation, balance sheet repair, and operational restructuring, which the government has described as essential for restoring competitiveness and reliability.
The transaction was formally concluded on Dec 23, following an Expression of Interest issued on May 7, 2025. Officials maintain that the sale structure balances investor confidence with the state’s objective of exiting direct airline management.
Constitutional Objections Raised
The petition was filed by Advocate Nabeel Javed Kahloon, who argues that the privatisation violates the Pakistan International Airlines Corporation (Conversion) Act, 2016, reported Dawn.
He contends that PIA qualifies as a trans-provincial institution listed under the Federal Legislative List, Part II.
According to the petition, any decision to privatise such an entity requires approval from the Council of Common Interests under Article 154 of the Constitution. The petitioner claims no such approval was obtained, rendering the cabinet committee’s decision unlawful.
The filing also asserts that Parliament did not authorize the sale and that Sections 3 and 4 of the 2016 Act require any restructuring or asset transfer to remain within government-controlled entities.
On this basis, the petitioner argues the transaction exceeds the government’s legal authority.
Financial And Legal Claims
Advocate Kahloon further argues that the privatisation was justified through misleading financial claims. He disputes official assertions that the airline represents an ongoing fiscal burden, stating that PIA has not received regular government grants or subsidies.
The petition maintains that the airline’s financial stress stems primarily from debt servicing costs, governance failures, and policy decisions rather than operational losses alone.
It also challenges claims that the airline’s valuation is five times lower than its accumulated losses of around Rs800 billion.
The filing alleges misuse of authority, lack of transparency, and arbitrariness in the sale process. It also challenges a December 2023 amendment to the Privatisation Commission Ordinance, arguing that the clause limiting high court jurisdiction does not apply to constitutional matters.
Bottom Line
The petitioner has asked the court to declare the Dec 23, 2025, sale agreement null and void and to suspend all further actions stemming from the May 2025 Expression of Interest.
He has also requested that any restructuring efforts be kept strictly within state-owned entities until legal requirements are met.
The case introduces significant legal uncertainty into one of Pakistan’s most high-profile privatisation efforts.
Its outcome could shape not only the future of PIA but also the broader framework governing the sale of strategic national assets.
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