UAE pulls back from plan to manage Pakistan's Islamabad airport: Report
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.
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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.
Leveraging friendships
Nuclear-armed Pakistan has long sent military officers and advisors to train and participate in Saudi Arabia’s armed forces. In return, Riyadh has provided a financial lifeline to Islamabad. In 2018, it gave a $6bn aid package to Pakistan. Saudi Arabia has billions of US dollars deposited in its central bank.
Both Saudi Arabia and the UAE are accustomed to using their wealth to bail out their poorer allies, with political and profit motives lurking behind their moves.
While negotiations with Pakistan appear to have moved slowly in the airport deal, in Egypt, the UAE has acted swiftly to provide financial backing to President Abdel Fattah el-Sisi’s government. In 2024, Abu Dhabi made a $35bn direct investment to acquire development rights to a patch of Egypt’s Mediterranean coast.
In recent months, Pakistan’s government has turned to the Middle East for customers for arms deals, as it looks to capitalise on its military success against India in a short-lived but deadly conflict last year.
Saudi Arabia is behind a deal to supply Sudan’s army with Karakoram-8 light attack aircraft, more than 200 drones, and advanced air defence systems from Pakistan. Sudan could also acquire Joint Fighter-17 jets, which were jointly developed with China and are produced in Pakistan.
Just as Saudi Arabia has entered into a defensive pact with Islamabad, the UAE appears to be inching closer to India. The two countries signed an agreement this week to deepen their defence and trade ties.
New Delhi signed a $3bn deal to purchase liquefied natural gas from the UAE, making it Abu Dhabi's largest customer.
The deal signed by the two countries includes nuclear cooperation, development and deployment of "large nuclear reactors", and nuclear safety.
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