Regional
Ahead of election, Pakistan seals plan to sell national airline
Ahead of elections next week, Pakistan’s caretaker administration is making binding plans for a new government to sell loss-making Pakistan International Airlines (PIAa.PSX), opens new tab, according to the minister in charge of the process and other officials.
In the past, elected governments have shied away from undertaking unpopular reforms, including the sale of the flag carrier. But Pakistan, in deep economic crisis, agreed in June to overhaul loss-making state-owned enterprises under a deal with the International Monetary Fund (IMF) for a $3 billion bailout, Reuters reported.
The government decided to privatise PIA just weeks after signing the IMF agreement.
The caretaker administration, which took office in August to oversee the Feb. 8 election, was empowered by the outgoing parliament to take any steps needed to meet the budgetary targets agreed with the IMF.
“Our job is 98% done,” Privatisation Minister Fawad Hasan Fawad told Reuters when asked about the plan to sell the airline. “The remaining 2% is just to bring it on an excel sheet after the cabinet approves it.”
Fawad said the plan, drawn up by transaction adviser Ernst & Young, will be presented to the cabinet for approval before the tenure of the administration ends following the election. The cabinet will also decide whether to sell the stake by tender or through a government-to-government deal, Fawad said.
“What we have done in just four months is what past governments have been trying to do for over a decade,” Fawad said. “There is no looking back.”
Details of the privatisation process have not been previously reported.
PIA had liabilities of 785 billion Pakistani rupees ($2.81 billion) and accumulated losses of 713 billion rupees as of June last year. Its CEO has said losses in 2023 were likely to be 112 billion rupees.
Progress on the privatisation will be a key issue if the incoming government goes back to the IMF once the current bailout programme expires in March. Caretaker Finance Minister Shamshad Akhtar told reporters last year that Pakistan would have to remain in IMF programmes after the expiry.
Two sources close to the process told Reuters that a 51% stake with full management control would be offered to buyers after parking the airline’s debts in a separate entity, under the 1,100 page report from Ernst & Young.
Reuters could not independently confirm the contents of the report. Fawad did not give specific details of the size of the stake to be sold, but confirmed the plan involved the carrier’s debts being spun off into a separate entity.
Ernst & Young did not respond to requests for comment.
PIA spokesman Abdullah Hafeez Khan said the airline was assisting the privatisation process, extending “full cooperation” to the transaction adviser.
Regional
UAE countering Iranian air attack after Trump says ceasefire still in effect
U.S. ally the United Arab Emirates said its air defences were engaging missile and drone threats from Iran early on Friday in a further test of the shaky, month-long ceasefire between the U.S. and Iran.
There were few details immediately available about the latest attack on the UAE, which came a day after the U.S. and Iran exchanged fire around the Strait of Hormuz, and as Washington awaited a response from Tehran to its proposal to end the conflict. Iran has often targeted the UAE and other Gulf countries that host U.S. bases since the war began on February 28, Reuters reported.
President Donald Trump said on Thursday three U.S. Navy destroyers were attacked as they moved through the strait, a conduit for around a fifth of the world’s oil and liquefied natural gas flows that Iran has all but closed since the conflict started.
“Three World Class American Destroyers just transited, very successfully, out of the Strait of Hormuz, under fire. There was no damage done to the three Destroyers, but great damage done to the Iranian attackers,” Trump wrote on Truth Social.
Trump later told reporters the ceasefire was still in effect and sought to play down the exchange.
“They trifled with us today. We blew them away,” Trump said in Washington.
Iran’s top joint military command accused the U.S. of violating the ceasefire by targeting an Iranian oil tanker and another ship, and of carrying out air attacks on civilian areas on Qeshm Island in the Strait of Hormuz and the nearby coastal areas of Bandar Khamir and Sirik on the mainland. The military said it responded by attacking U.S. military vessels east of the strait and south of the port of Chabahar.
A spokesperson for Iran’s Khatam al-Anbiya Central Headquarters said the Iranian strikes inflicted “significant damage,” but U.S. Central Command said none of its assets were hit.
Iran’s Press TV later reported that, following several hours of fire, “the situation on Iranian islands and coastal cities by the Strait of Hormuz is back to normal now.”
The two sides have occasionally exchanged gunfire since the ceasefire took effect on April 7, with Iran hitting targets in Gulf countries including the UAE.
Oil prices rose in early trade in Asia on Friday, with Brent crude jumping above $100 a barrel after the latest clashes between the U.S. and Iran.
TRUMP URGES NEGOTIATED END TO WAR
Trump suggested ongoing talks with Tehran remained on track despite Thursday’s hostilities, telling reporters, “We’re negotiating with the Iranians.”
Before the latest strikes, the U.S. had floated a proposal that would formally end the conflict but did not address key U.S. demands that Iran suspend its nuclear work and reopen the strait.
Tehran said it had not yet reached a decision on the emerging plan.
Even so, Trump said Tehran had acknowledged his demand that Iran could never get a nuclear weapon, a prohibition he said was spelled out in the U.S. proposal.
“There’s zero chance. And they know that, and they’ve agreed to that. Let’s see if they are willing to sign it,” Trump said.
Asked when any deal might be reached, Trump said, “It might not happen, but it could happen any day. I believe they want to deal more than I do.”
The war has tested Trump’s relationship with his U.S. base of supporters, after he had campaigned against involving the United States in foreign wars and promised to bring down fuel prices.
Average U.S. gasoline prices have climbed more than 40% since late February, rising by about $1.20 a gallon to more than $4, according to data from the American Automobile Association, as disruptions to oil shipments through the Strait of Hormuz pushed crude oil prices higher.
Regional
US and Iran closing in on one-page memo to end war, Axios reports
The U.S. State Department and White House did not immediately respond to a request for comment.
The White House believes it is getting close to an agreement with Iran on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations, Axios reported on Wednesday, citing two U.S. officials and two other sources briefed on the issue.
The U.S. expects Iranian responses on several key points in the next 48 hours, according to the report which cautioned that nothing has been agreed yet but said this was the closest the parties had been to an agreement since the war began, Reuters reported.
Among other provisions, the deal would involve Iran committing to a moratorium on nuclear enrichment, the U.S. agreeing to lift its sanctions and release billions in frozen Iranian funds, and both sides lifting restrictions around transit through the Strait of Hormuz, Axios said.
The one-page, 14-point memorandum of understanding is being negotiated between U.S. envoys Steve Witkoff and Jared Kushner and several Iranian officials, both directly and through mediators, the report said.
In its current form, the memorandum would declare an end to the war in the region and the start of a 30-day period of negotiations on a detailed agreement to open the strait, limit Iran’s nuclear programme and lift U.S. sanctions, Axios added.
Iran’s restrictions on shipping through the strait and the U.S. naval blockade would be gradually lifted during that 30-day period, Axios said, citing one U.S. official who added that if the negotiations collapse, U.S. forces would be able to restore the blockade or resume military action, read the report.
Iran said earlier on Wednesday it would accept a peace deal only if it was “fair”, after U.S. President Donald Trump paused a three-day-old naval mission tasked with reopening the Strait of Hormuz that had shaken the war’s month-old ceasefire.
Reuters could not immediately verify the report. The U.S. State Department and White House did not immediately respond to a request for comment.
U.S. stock index futures extended gains following the Axios report.
Regional
Iran foreign minister meets Chinese counterpart for first time since Iran war started
U.S. Treasury Secretary Scott Bessent urged China to intensify its diplomatic efforts to persuade Iran to open the Strait of Hormuz to international shipping.
Iranian Foreign Minister Abbas Araqchi met China’s top diplomat in Beijing on Wednesday, underscoring close ties between the two countries shortly before U.S. President Donald Trump is scheduled to travel to meet with Xi Jinping, Reuters reported.
Araqchi’s visit, announced by state news agency Xinhua, is his first trip to China since the U.S.-Israeli war on Iran set off the most severe global oil supply shock in history and undermined the energy security of China, the world’s top crude importer.
Earlier this week, U.S. Treasury Secretary Scott Bessent urged China to intensify its diplomatic efforts to persuade Iran to open the Strait of Hormuz to international shipping.
Bessent said Trump and Xi would exchange views on Iran in person during their May 14 to 15 talks in Beijing. But he emphasized the two will seek to keep the steady U.S.-China relationship on track following a trade truce in October.
He urged China to “join us in this international operation” to open the strait, but did not specify what actions Beijing should take. He added that China and Russia should stop blocking initiatives at the United Nations, including a resolution encouraging steps to protect commercial shipping in the strait.
Earlier this week, the U.S. and Iran launched new attacks in the Gulf as they wrestled for control over the strait with duelling maritime blockades, threatening what was already a fragile truce.
Trump later said the U.S. Navy would help ships pass through the strait. But that operation was paused after Trump on Tuesday said there had been “great progress” made toward a comprehensive agreement with Iran.
There was no immediate reaction from Tehran, read the report.
The Iranian foreign minister on Monday said the attacks, taking place after he said Tehran was looking into Trump’s request for negotiations, showed there was no military solution to the crisis.
China has engaged in a flurry of diplomatic activity and refrained from forceful criticism of the U.S.’ conduct of the war so that the summit, already postponed once by the conflict, can go smoothly, analysts have told Reuters.
China has repeatedly urged the U.S. and Iran to maintain the ceasefire and lift the restrictions in the strait. Trump has also credited Beijing with helping to get Iran to attend last month’s peace talks in Pakistan.
Last week, China escalated its opposition to U.S. sanctions against Chinese oil refineries over purchases of Iranian crude. Its Ministry of Commerce ordered companies not to comply with U.S. sanctions against five independent refiners, including the recently designated Hengli Petrochemical, invoking for the first time a law that allows Beijing to retaliate against entities enforcing sanctions that it deems unlawful, Reuters reported.
China buys more than 80% of Iran’s shipped oil, data for 2025 from analytics firm Kpler showed. Iranian oil has had limited buyers due to U.S. sanctions that are aimed at cutting off funding to Tehran’s nuclear programme.
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