ByIslamabad, Pakistan: In a significant development for air travelers, the International Monetary Fund (IMF) has approved a waiver of the Federal Excise Duty (FED) on Pakistan International Airlines (PIA) international tickets. This move is expected to lead to a substantial decrease in airfares for passengers flying internationally.
Sources at the Privatization Commission (PC) confirmed that the IMF granted the waiver at the request of the Pakistani government. This decision is expected to bring significant relief to passengers, with potential savings 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 exclusively to international PIA flights. Domestic flights will continue to be subject to the Federal Excise Duty.
The 2024 budget had previously imposed a substantial Rs. 56 billion in additional FED on air travel, significantly impacting ticket prices. This IMF approval provides much-needed relief for passengers and aims to boost air travel within Pakistan.
Furthermore, the IMF has agreed to transfer Rs. 46 billion in negative equity associated with PIA to a holding company. This move is crucial for improving the airline’s financial health and making it more attractive to potential investors. The government is also amending regulations to allow bidders to compete for a 60% stake in PIA, paving the way for its privatization.
This development is a positive step towards improving the competitiveness of PIA and making international travel more affordable for Pakistani citizens.
