ISLAMABAD, June 1: Pakistan International Airlines on Friday increased fares on domestic routes by 10 per cent. A PIA official told Dawn that the fare increase would be applicable from June 1 on all classes and routes, including the ones that were subsidised.

The fare increase followed the $522 million bank loan to fund the acquisition of three new Boeing 777-300 ER aircraft for the national flag-carrier.

The national flag carrier had posted Rs3.95 billion losses during the first quarter ending March 2007 despite stable fuel prices that generally remained below the 2006 level. Factors attributed to the Rs3.95 billion losses were increase in salary of employees, increased cost of leased aircraft and higher fleet maintenance cost resulting in 19 per cent increase in operating expenses.

Interestingly, the airline is still collecting fuel surcharge to ‘offset the impact of increase in fuel cost’ at a time when most other airlines had discontinued the surcharge.