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Pakistan International Airlines (PIA) international ticket prices could drop significantly after the International Monetary Fund (IMF) approved a waiver of the Federal Excise Duty (FED).
According to sources at the Privatization Commission (PC), the IMF granted the waiver at the request of the Pakistani government. This move could lead to substantial savings for passengers, with potential reductions of up to Rs. 350,000 on flights to the USA. Travelers to Africa and the Middle East could see fares decrease by as much as Rs. 105,000, while those flying to Europe, Australia, New Zealand, and the Far East may experience savings of up to Rs. 210,000.
It’s important to note that the FED waiver applies only to international PIA tickets. Domestic flights will continue to be subject to the Federal Excise Duty, PC officials confirmed.
The 2024 budget had previously imposed a substantial Rs. 56 billion in additional Federal Excise Duty (FED) on air travel, a move that has now been partially addressed.
PC officials have revealed that IMF has permitted Pakistan to waive an 18% sales tax on the purchase or lease of new aircraft. To improve PIA’s financial standing, the IMF has also agreed to transfer Rs. 46 billion in negative equity associated with the airline to a holding company. This measure is expected to reduce operational costs and make PIA a more attractive prospect for potential investors.
Officials have emphasized the government’s commitment to privatizing PIA. To facilitate this, the federal government is amending regulations to allow bidders to compete for a 60% stake in the airline.
