THE transfer of Pakistan International Airlines (PIA) to private ownership is, on balance, a welcome development. Yet much of the public discussion has focused narrowly on the headline sale price and the promise of improved efficiency, obscuring more fundamental issues. In a recent podcast, we and two other analysts examined the transaction in detail and noted concerns about the post-sale ownership structure, which appears likely to be dominated by Fauji Fertiliser, raising questions about whether this represents genuine privatisation or a form of quasi-nationalisation.

This article steps back from the headlines to distil the broader lessons of the PIA episode. Four reform-related lessons stand out.

First, privatisation did not create the cost; it revealed it. The sale of PIA is being marketed as reform, yet little attention has been paid to the bill already paid by taxpayers to make the sale possible. Before privatisation, the state absorbed the airline’s accumulated debt and liabilities — over Rs670 billion (roughly $3bn) — so that a buyer could inherit a cleaner balance sheet.

PIA is not an isolated case. It is simply the most visible example of a systemic failure in how Pakistan governs its state-owned enterprises (SOEs). The common thread linking PIA, the previously privatised banks, and smaller cases such as First Women Bank is not bad luck or exogenous shocks. It is bureaucratic and patronage-protected control exercised through boards of directors that enjoy prestige and perks but face no personal or reputational downside when value is destroyed.

The central lesson from........

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