The new owners of Pakistan International Airlines (PIA) have raised serious concerns over the airline’s future as jet fuel prices continue to rise sharply, putting pressure on operations and long-term sustainability.
Chairman of the PIA Consortium, Arif Habib, warned that the situation could become critical if fuel costs remain high.
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In a recent interview, he said, “PIA could be forced to shut down” if the current trend continues.
Jet fuel prices have increased significantly in recent weeks, largely due to global supply disruptions linked to tensions between the United States and Iran.
According to official figures, the price of jet fuel (JP-1) rose by Rs84 per litre, reaching Rs472 from Rs388 per litre from March 21.
Since the start of the month, prices have surged by nearly 150 percent, up from Rs190 per litre.
Habib linked this increase to the government’s strategy of managing rising oil costs by adjusting fuel prices.
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He explained that authorities appear to be using higher prices for premium and aviation fuels to offset the financial burden of subsidies provided to the public.
“In Pakistan, the government has raised prices but not in line with global markets. It seems like the government is trying to bear some burden from the savings it has made from the austerity measures and some through the cross-subsidy,” he said.
Last week, Finance Minister Muhammad Aurangzeb stated that targeted relief measures were being introduced to support deserving citizens, adding that the government had already absorbed a financial burden of Rs69 billion.
However, Habib believes the current approach is not sustainable.
“On increasing the price of aviation fuel, I consider that it is a misunderstanding by the government that the common man doesn’t use aviation,” he said.
He added that while PIA has managed to continue operations so far, the rising costs could soon make it difficult to function.
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“It will be forced to close,” he warned.
Aviation experts note that fuel costs make up around 30 to 40 percent of an airline’s total expenses.
As prices rise, airlines are left with little choice but to increase ticket fares. Domestic ticket prices have already gone up by Rs10,000 to Rs15,000, while international fares have increased by Rs30,000 to Rs40,000. Further increases are expected if global oil prices continue to climb.
Experts also warn that higher fuel costs could affect Pakistan’s competitiveness in the global aviation market, as fuel prices in the country are higher compared to many international markets.
This could make air travel less affordable for passengers and more challenging for airlines to sustain operations.
