Government Denies Buying Aircraft for Privatised PIA
- The government of Pakistan is not purchasing any aircraft for Pakistan International Airlines (PIA), nor has it issued sovereign guarantees for taxpayer-funded loans to procure new jets, according...
- The clarification followed social media claims alleging that a government minister was negotiating sovereign-linked financing for aircraft.
- During the New York meeting, the finance ministry stated that discussions covered potential funding opportunities for procuring aircraft for PIA, specifically noting the airline's interest in Boeing’s 787...
The government of Pakistan is not purchasing any aircraft for Pakistan International Airlines (PIA), nor has it issued sovereign guarantees for taxpayer-funded loans to procure new jets, according to Khurram Schehzad, adviser to the finance minister.
The clarification followed social media claims alleging that a government minister was negotiating sovereign-linked financing for aircraft. Those rumors spread after Finance Minister Muhammad Aurangzeb met with U.S. Export-Import (Exim) Bank Chair John Jovanovich on the sidelines of the 81st session of the United Nations General Assembly in New York.
Financing Discussions and U.S. Exim Framework
During the New York meeting, the finance ministry stated that discussions covered potential funding opportunities for procuring aircraft for PIA, specifically noting the airline’s interest in Boeing’s 787 Dreamliners. Aurangzeb sought support for a financing package covering aircraft and engines.
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Schehzad explained that the mandate of the U.S. Exim Bank, much like other export credit agencies, is to support exports and jobs within its own country. Boeing aircraft qualify as U.S. exports, enabling the bank to provide financing support to foreign purchasers of U.S.-manufactured aircraft through established structures.
Asset-backed aircraft financing allows funding to be secured against the aircraft itself, with credit assessed on the airline, lessee, or guarantor. Schehzad noted that a sovereign guarantee is therefore not an automatic requirement under the U.S. Exim framework.
“The government is neither buying aircraft for a privatised PIA, nor has it announced any sovereign guarantee of taxpayer-funded loan for doing so,”
Khurram Schehzad, Adviser to the Finance Minister
Broader Economic Engagement and Privatisation Policy
PIA was privatised through an auction in December last year. Schehzad described the government’s current involvement as standard facilitation for national businesses, comparing it to actions taken by governments globally to open doors, facilitate access to international financing and technology, and promote commercial opportunities.
The discussions in New York extended beyond the national flag carrier. Aurangzeb’s talks with U.S. Exim encompassed potential financing across aviation, refinery upgrades, and the Reko Diq mining project as part of broader Pakistan-U.S. economic engagement.
Schehzad emphasized that the state is deliberately reducing its role in commercial activity, pursuing privatisation to create greater space for private capital. Private-sector-led growth means the government enables enterprise rather than running businesses directly.
Consequently, official statements regarding potential U.S. Exim financing support do not constitute government borrowing for PIA or a sovereign guarantee. Schehzad concluded that privatisation transfers ownership and commercial management, but does not prevent the government from opening doors for Pakistani companies.