In a significant move aimed at modernising its aviation sector and in line with demands from the International Monetary Fund (IMF), Pakistan is poised to hand over the operational management of its capital’s airport — Islamabad International Airport — to a company from the United Arab Emirates under a government-to-government arrangement.
According to a briefing delivered in Parliament by Wasim Tariq, joint secretary for aviation, negotiations are underway with an Abu Dhabi-based entity that has offered Pakistan up to 60 per cent of total revenue generated by the airport. This offer beats a competing bid made by a UK-Turkish consortium comprising ERG UK and Terminal Yapi of Turkey, which had proposed only a 40 per cent revenue share.
The outsourcing of operations at Islamabad’s airport is part of a broader reform push by Pakistan, which is seeking to privatise or outsource management of its three major airports in Islamabad, Lahore and Karachi. Officials say that financial advisers are being appointed to help oversee the transition for the remaining airports. The move comes as the IMF has pressed the Pakistani government to restructure its economy by reducing state involvement in business operations and plugging revenue leakages.
In addition, Pakistan aims to conclude the sale of national carrier Pakistan International Airlines (PIA) by December, as part of its wider privatisation agenda. The country is expected to receive a USD 1.2 billion loan tranche from the IMF by December, contingent on progress with these structural reforms.
The decision to favour the UAE firm over the UK-Turkish consortium appears to reflect Islamabad’s inclination toward a stronger bilateral government-to-government arrangement and a higher revenue share. The Abu Dhabi entity’s willingness to offer 60 per cent has evidently tipped the scales in its favour amid a competitive bid process. Pakistan is reportedly in discussions to finalise the terms of this agreement.
Should the deal go through as currently structured, the UAE firm would assume operational and managerial responsibility for Islamabad International Airport, while Pakistan would retain oversight and benefit from a significantly larger revenue share compared with previous proposals. The expectation is that the improved operations and management will enhance airport infrastructure, passenger experience and revenue generation, aligning with Pakistan’s broader goals of modernising its aviation sector.
Observers note that such outsourcing aligns with global trends of public-private or government-private partnerships in airport operations, often intended to bring in specialised expertise, capital investment, operational efficiency and international best practices. For Pakistan, the timing is critical: the government is under pressure to meet IMF reform benchmarks, reduce public sector losses and stimulate private-sector participation in state-owned enterprises.
Nevertheless, the move raises some questions. For example, how will regulatory oversight and national security considerations be managed when a key infrastructure asset is entrusted to a foreign-based operator? Will Pakistan retain sufficient control over strategic decisions regarding the airport’s operations? And how swiftly can performance improvements be realised in an environment marked by bureaucratic inertia and infrastructural constraints?
For now, attention will centre on finalising the deal, appointing the financial advisers for the remaining airports, and seeing whether the broader privatisation strategy — including the sale of PIA — moves ahead as planned. The success of this scheme could determine Pakistan’s credibility with international lenders and its ability to meet reform timelines linked to the IMF support.
