The UAE has pulled out of a deal to take over the management of Islamabad airport in Pakistan, according to a report by the Express Tribune on Friday.
The UAE agreed on the framework of a privatisation deal with Pakistan’s cash-strapped government in August 2025, but the report said talks collapsed because the UAE lost interest in the project and failed to name a local partner to outsource operations.
The report did not attribute political motivations behind the collapsed deal, but it comes as a rift between the UAE and Saudi Arabia is reverberating across South Asia.
Saudi Arabia is leaning on Pakistan’s military know-how, while the UAE has signed new defence deals with India, Pakistan’s arch-rival.
While Islamabad has economic and historic ties to both Gulf states, it is generally closer to Saudi Arabia. The two countries signed a mutual defence pact in September 2025, and Turkey is now considering joining it.
Pakistan and the UAE also have a history of cooperation in several sectors, as well as in the commercial aviation sector.
Pakistan played a foundational role in establishing the UAE’s highly successful Emirates Airlines in the 1980s. In addition to providing technical expertise and personnel, it leased the airline its first two planes, one of which flew from Dubai to Karachi for the carrier’s inaugural flight. Pakistan’s national carrier has since declined precipitously.
Today, reforming Pakistan’s decayed aviation sector, with a recent history of deadly crashes, pilot licence scandals and antiquated technology, would be a heavy lift for any investor. But the UAE is familiar with operating in uncertain environments.
The UAE’s GAAC company holds a licence to provide ground services at Kabul, Herat and Kandahar airports in Afghanistan. Pakistan’s once-enviable national carrier, now a perennial loss-maker, was recently sold to a group led by Pakistani tycoon Arif Habib.
