The probe was ordered after a report in the English-language daily Dawn.
The paper said the January 20 flight to Medina carried 416 passengers, seven more than its capacity of 409 including jump seats, in a serious breach of air safety regulations.
The newspaper quoted sources as saying that in case of an emergency, passengers without seats would not have access to oxygen masks and could block any emergency evacuation.
Pakistan International Airlines’ spokesman Danyal Gilani said media reports that some passengers travelled standing “are exaggerated and baseless. It is not possible for anyone to travel like that in an aircraft, regardless of the duration of the flight.”
But he said: “The matter pertaining to the travel of more passengers than the booked load…is under investigation,” and the airline had ordered a “thorough probe into it, and all concerned are being questioned”.
“PIA is committed to ensure the safety of the passengers and cannot allow any incident to happen which compromises safety,” he added.
It was the latest embarrassing incident for the airline, considered a global leader until the 1970s but plagued by controversies over recent years and saddled with billions of dollars of debt.
A PIA turboprop built by European manufacturer ATR plummeted into a mountain in a northern region on December 7, bursting into flames and killing all 47 people on board.
The airline was later mocked after its staff were photographed sacrificing a goat on a runway to ward off bad luck.
Domestic flights are often delayed for VIPs while flight employees have been caught smuggling goods ranging from iPhones to narcotics.