PM's aide says no sovereign guarantee for PIA aircraft financing
Khurram Schehzad, adviser to the prime minister on finance, said on Sunday that the government is neither buying aircraft for Pakistan International Airlines, which was privatised through an auction in December last year, nor has it announced any sovereign guarantee of a taxpayer-funded loan to that end.
He was responding, in a post on X, to claims on social media that a minister was arranging and negotiating sovereign-linked financing for the jets. The claims followed a meeting between Finance Minister Muhammad Aurangzeb and the chair of the US Export-Import Bank, John Jovanovich, on the sidelines of the 81st session of the United Nations General Assembly in New York. The finance ministry said the two discussed the Reko Diq mining project and funding opportunities for procuring aircraft for Pakistan International Airlines, and that the finance minister shared the airline's interest in Boeing's 787 Dreamliners and sought support for a financing package covering aircraft and engines.
In his post, Schehzad said the US Export-Import Bank's mandate, like that of export credit agencies elsewhere, is to support its country's exports and jobs. Boeing aircraft are US exports, he said, and the agency provides financing support to foreign purchasers of US-manufactured aircraft, including airlines, through established financing structures. Its own framework provides for asset-backed aircraft financing, in which financing can be secured against the aircraft itself and credit assessed on the airline, lessee or guarantor, if any. "A sovereign guarantee is therefore not an automatic requirement," he said.
Schehzad described the government's role as doing what governments around the world are expected to do for their businesses: opening doors, facilitating access to international financing, technology and suppliers, and promoting investment and commercial opportunities. He said the finance minister's engagement with the US Export-Import Bank was not confined to Pakistan International Airlines and covered potential financing across aviation, refinery upgrades and Reko Diq as part of a broader Pakistan-US economic engagement. He added that the government is deliberately reducing the state's role in commercial activity, pursuing privatisation and creating greater space for private capital, and that enabling the private sector is not the same as running businesses.
He cautioned against presenting claims of a "public loan, hidden subsidy, state backstop" or of taxpayers assuming the airline's commercial risk as facts, saying no such arrangement has been announced. The official statement, he said, refers to potential US Export-Import Bank financing support and does not announce government borrowing for the airline or a sovereign guarantee. Privatisation transfers ownership and commercial management, he added, and does not require the government of Pakistan to stop opening doors for Pakistani companies.
