Lahore, Sunday, January 4, 2026 – A constitutional petition has challenged the PIA privatisation challenge in the Lahore High Court. Advocate Nabeel Javed Kahloon filed it against the Rs135 billion Arif Habib consortium bid. He claims a CCI approval violation and seeks to declare the sale null and void.
This PIA privatisation challenge raises questions on national asset management in Pakistan. It could delay reforms aimed at reducing fiscal burdens from loss-making entities, such as PIA, which holds strategic importance in South Asian aviation.
Lahore High Court Petition: Key Allegations
The Lahore High Court petition pertains to the sale on December 23, 2025. It argues that the process breaches the Pakistan International Airlines Corporation (Conversion) Act 2016. Petitioner states PIA is a trans-provincial institution under the Federal Legislative List Part II.
Without the approval of the Council of Common Interests under Article 154 of the Constitution, privatisation cannot proceed. The Cabinet Committee on Privatisation endorsed the deal without this step. Parliament also lacked involvement.
Advocate Kahloon represents aviation employees. He alleges harassment for opposing the move. The petition demands the suspension of further actions following the May 7, 2025, Expression of Interest.
It seeks to continue restructuring within state-owned entities, as per sections 3 and 4 of the 2016 Act. Massive public funds invested over decades make the sale a matter of public interest.
The government falsely portrayed PIA as a burden. Accumulated losses reach Rs 800 billion, but stem from debt servicing, mismanagement, and policy failures, rather than subsidies or grants.
The process shows misuse of authority, lack of transparency, and arbitrariness. An amendment to Section 28 of the Privatisation Commission Ordinance on December 14, 2023, ousts the High Court’s jurisdiction for bidder disputes. However, this case involves constitutional violations.
Judicial scrutiny applies under Article 199 for national assets. The Lahore High Court petition requests that the agreement be voided and that steps be halted.
Arif Habib Consortium Bid: Details of the Deal
The Arif Habib consortium bid won endorsement from the Cabinet Committee on Privatisation. It offered Rs 135 billion for a 75 percent stake. This exceeds the reference price of Rs100 billion set by the Privatisation Commission.
The consortium includes Arif Habib Corporation Limited and partners. It pledged an additional Rs80 billion to Rs125 billion for fleet modernization and operations.
The Privatisation Commission Board recommended approval on December 24, 2025. The bid process started with an Expression of Interest on May 7, 2025. Four bidders have been prequalified, including the Arif Habib group.
The Standing Committee on Defence learned of the Rs135 billion win on December 24, 2025. The committee appreciated efforts for the national carrier’s revival.
PIA holds a 75 per cent stake, as offered. Proceeds allocate 92.5 per cent to debt clearance. The deal aims to stabilise the airline amid Rs800 billion losses.
CCI Approval Violation: Constitutional Concerns
The PIA privatisation challenge centres on CCI approval violation. The petitioner claims that the federal government ignored the mandatory CCI consent for trans-provincial entities.
Article 154 requires CCI oversight. No records show approval obtained.
The Cabinet proceeded illegally via committee order. This bypasses constitutional safeguards. PIA’s status demands such steps for legitimacy.
Similar issues arose in past privatisations. The violation could invalidate the entire process if upheld.
Background
PIA was established in 1955 as a national carrier. It converted to a corporation in 2016 under the Act. Losses mounted due to competition, fuel costs, and inefficiencies.
The government initiated privatisation in 2025 for fiscal relief. Expression of Interest drew interest from local and international groups.
Prequalification included Arif Habib consortium, Lucky Cement, Fauji Fertilizer, and Air Blue. Bidding occurred on December 23, 2025.
The sale follows broader reforms of state-owned enterprises. Pakistan aims to reduce public sector burdens through such measures.
Legal challenges emerged post-announcement. Employees and stakeholders raised transparency issues. The Lahore High Court petition marks the first significant judicial hurdle.
What’s Next
The court may schedule hearings soon. If granted, an interim stay could pause the handover. The government may respond in defense of the process.
The outcome influences future privatisations. Stakeholders monitor for impacts on the aviation sector. This PIA privatisation challenge tests the balance between economic reforms and constitutional norms.
Published in SouthAsianDesk, January 4th, 2026
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