RAWALPINDI, March 2: The Pakistan International Airlines has asked the government to give it permission to enhance fares on both international and domestic routes by 15 per cent to cope with petroleum price spiral, informed sources told Dawn on Saturday.
A decision to this effect was expected in a few days, the source said and added that the government had shown its willingness to increase the fares by less than 10 per cent.
The source said the price of Jet fuel JP-1 in the international market had risen to US$40 per barrel, up by US$12 per barrel from the last month’s rates of US$28 per barrel.
The prices of fuel have registered an upward trend in the international market due
to Iraq crisis and it is being anticipated that the prices would soon cross the levels reached during the 1991 Persian Gulf War.
The raise in the fuel prices puts extra financial burden on the PIA, as the global airline industry as a whole faces one of its most difficult periods.
The military government linked changes in air fares with the fluctuation of prices of fuel in the international market. However, the civilian government, after coming into the power, had made any fares increase conditional to government’s approval.
The airline had earned a net profit of Rs2.5 billion during the last fiscal year and it was targeting to increase this by another Rs3.5 billion during the current year.
The sources said the airline’s calculations about the impact of the increase in fuel prices suggested it could be equivalent to the entire profit earned during the last year. Moreover, targets set for next year could be greatly disturbed.
