In what is being billed as a major step towards prvatisation, the government has approved the formation of the Pakistan International Airlines holding company.

The approval was given by the federa cabinet in a meeting on Wednesday.

PIA’s chief executive officer will served as the head of the holding company for the time being, according to the cabinet decision.

Prime Minister Shehbaz Sharif has called for the process of privatising the national flag carrier to be expedited. He also asked authorities to submit a plan regarding the outsourcing of airports in the country.

A report in February, just before the country went to the polls, had indicated that the interim cabinet gave its approval on the recommendation of Pakistan’s privatisation commission, a body assigned to sell off all loss-making state-owned enterprises (SOEs).

The restructuring plan had split PIA into two entities.

One ‘clean’ one will be offered up for sale and the other will be parked in a holding company with legacy debt, which includes negative equity of Rs825 billion ($2.95 billion) in loans, creditors’ money and losses.

The statement from the prime minister’s office said the plan which had been approved would “divide the PIA into two companies, TopCo and HoldCo”.