Pakistan International Airlines (PIA) has selected Tewolde Gebremariam, former head of Ethiopian Airlines, as its new chief executive officer, two officials confirmed on Saturday. The appointment is part of efforts to revive the struggling former state carrier, which was privatized in December after accumulating over $2.8 billion in losses.
Tewolde's Track Record
Under Tewolde's leadership, Ethiopian Airlines grew into Africa's largest carrier, connecting cities across the continent from its transit hub in Addis Ababa. His expertise in turning around an airline is expected to boost the Arif Habib Group-led consortium's bid to revive PIA.
Confirmation and Security Clearance
Arab News reached out to Arif Habib, chairman of the Arif Habib Group, but he did not respond. However, a well-placed PIA official confirmed that Tewolde has been selected. “The PIA would not announce his name until all the security clearances are not completed,” the official said, requesting anonymity as he was not authorized to speak to media. A major PIA shareholder also confirmed the development, stating, “He (Tewolde) has been hired. He is a very capable person and has done a lot of turnarounds.”
Privatization and Investment Details
The appointment comes more than a week after Pakistan announced the first closing of the divestment of the Pakistan International Airlines Corporation Limited (PIACL) through privatization. Management control was transferred to the consortium led by Arif Habib Corporation, following satisfaction of all conditions under the Share Purchase and Subscription Agreement (SPSA). Under the first closing, the consortium paid Rs10 billion ($36 million) to the government as sale proceeds and injected Rs80 billion ($288 million) into PIACL as fresh equity. This injection aims to strengthen the airline’s financial position, support fleet expansion and modernization, expand its route network, and enhance operational performance and customer service.
The bidding process, held on December 23, resulted in a total investment commitment of Rs180 billion ($643 million) by the consortium. Of this, Rs55 billion ($197 million) will be paid to the government for the sale of PIA, and Rs125 billion ($449 million) will be injected into the airline to support its long-term transformation and revive the national carrier to its past glory, according to the Privatization Commission.
Future Commitments
The second closing is scheduled within 12 months of the first closing, in accordance with the SPSA terms, whereby the consortium has committed to invest a further Rs45 billion ($161 million) into PIACL. The consortium has also expressed intent to buy the remaining 25 percent of PIACL shares as a call option under the SPSA for an additional payment of Rs45 billion ($161 million) to the government.
