The sustainability of Pakistan’s national flag carrier has been thrown into serious doubt following an unprecedented surge in aviation fuel costs. Arif Habib, Chairman of the Pakistan International Airlines (PIA) Consortium, has issued a stark warning that the airline could be forced to cease operations entirely if the government does not immediately reverse recent price hikes. Speaking in a recent interview, Habib highlighted that jet fuel (JP-1) rates have skyrocketed by nearly 150 percent in less than a month, a trajectory that he describes as completely unsustainable for the aviation industry. This sudden fiscal pressure comes at a time when the global supply chain is already reeling from the impacts of the conflict between the United States and Iran.
The technical data regarding fuel pricing reveals a dramatic shift in the airline’s operating environment. Since March 1, the price of JP-1 has surged from Rs 190 per litre to a staggering Rs 472 per litre. A significant portion of this increase occurred on March 21, when rates were raised by over 21 percent in a single day without a formal public announcement. Habib explained that these hikes are not solely a reflection of international market trends but are partly the result of a domestic cross-subsidy strategy. He suggested that the government is utilizing high-octane and aviation fuel price increases to generate the necessary fiscal room to subsidize fuel costs for ordinary citizens and low-income transport segments.
Finance Minister Muhammad Aurangzeb recently noted that the government has taken on a fiscal burden of Rs 69 billion to provide “targeted relief” to deserving populations. However, Habib argues that this approach is flawed and reflects a misunderstanding of the aviation sector’s role. He challenged the notion that aviation is a luxury used only by the wealthy, pointing out that a broad segment of the population relies on air travel for employment, trade, and family connectivity. According to Habib, while PIA has managed to navigate the current month through sheer resilience, the ongoing burden of these inflated fuel costs will make it impossible for the airline to remain operational in the long term.
The impact of these rising costs is already being felt by travelers. Aviation experts note that fuel typically accounts for 30 to 40 percent of an airline’s total operating expenses. To cope with the 150 percent hike, airlines have been forced to increase ticket fares by 20 to 30 percent. On domestic routes, ticket prices have climbed by as much as Rs 15,000, while international fares have seen spikes of up to Rs 40,000. Habib warned that if these prices are maintained, Pakistani carriers will lose their competitive edge against international airlines, which have access to jet fuel at global market rates that are currently lower than the artificial highs seen within Pakistan.
The businessman called on the government to reconsider its “cross-subsidy” model, suggesting that the burden of high oil prices must be distributed more equitably across the economy. He emphasized that the current measures are a “misunderstanding” of how essential aviation services are to the national infrastructure. Without a policy reversal, the risk of a total shutdown of PIA operations becomes a looming reality, which would have cascading effects on the country’s connectivity and its standing in the international maritime and aviation corridors.
As global oil prices continue to fluctuate amid regional uncertainty, the high-level decision-makers in Islamabad face a difficult balancing act. They must find a way to provide relief to the masses without bankrupting the national airline or stifling the broader aviation ecosystem. For the PIA Consortium, the immediate priority is securing a predictable and fair pricing mechanism for JP-1 that aligns with international benchmarks, ensuring that the airline can continue to serve the public and remain a viable entity in a highly volatile global market.
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