
An undated image of Pakistan International Airlines. — Pexels
Pakistan International Airlines (PIA) is going to make international travel cheaper. Ticket prices are likely to go down significantly after the International Monetary Fund (IMF) agreed to waive the Federal Excise Duty (FED) on PIA's international flights at the Pakistani government's request.
The new move by the federal government will reduce the air ticket price of travelers bound for the USA by as much as Rs350,000. Travellers bound for Africa and the Middle East may have their air ticket prices cut by Rs105,000.
Fares to Europe, Australia, New Zealand, and the Far East could be slashed by up to Rs210,000. But here is the important point: only international tickets will benefit from the waiver. Domestic flights will still include the excise duty.
How this helps PIA and passengers
This move also helps passengers, but it also supports the financial recovery of PIA. The IMF has also allowed Pakistan to waive the 18% sales tax on the purchase or lease of new aircraft, which will reduce operational costs.
Moreover, Rs46 billion in PIA's negative equity will be transferred to a holding company, making the airline more attractive to potential investors.
Government focused on PIA privatisation
The Pakistani government is moving on with plans to privatise PIA. There are new regulations being initiated to allow bidders to compete for a 60% stake in the airline. These steps form part of broader reforms to improve finances and operations in the airline.