Asian – Dispatch

Airline suspends China, Malaysia routes, limits Gulf operations as fares rise up to 30% amid cost pressure

Pakistan International Airlines (PIA) has reduced flight frequencies and adjusted ticket pricing as a sharp rise in jet fuel costs has increased operating pressure during its ongoing privatisation transition, Business Recorder reported, citing aviation sources.

Jet fuel (JP-1) prices have increased by around 150%, rising from about Rs190 per litre to over Rs450, according to industry estimates. Fuel accounts for 30% to 40% of airline operating costs, making it a key factor affecting margins.

To manage costs, PIA has introduced and adjusted fuel surcharges, with sources indicating an additional charge of about $10 on domestic routes and up to $100 on international flights depending on route structure. Officials said base fares have not been formally revised, but removal of discounts and added surcharges have effectively increased ticket prices.

The airline has also suspended several international routes, including Beijing and Kuala Lumpur, and scaled back operations across parts of its Gulf network, while reallocating aircraft for Hajj operations.

Industry analysts estimate that overall airfare levels may rise by 20% to 30% as airlines attempt to pass on part of the fuel cost increase. However, officials said pricing adjustments are constrained by demand and competition on key routes.

PIA has also temporarily suspended operations to China and Malaysia for two to three months, while flights to some Gulf destinations, including Dubai and Abu Dhabi, remain limited due to regional conditions and airspace constraints.

The developments come as PIA continues its transition following the sale of a 75% stake to a private consortium led by the Arif Habib Group, with the government retaining a 25% share.

Officials said the airline remains in a restructuring phase focused on cost management and operational adjustments, with an internal transition milestone expected around April 29. Plans to expand fleet size and restore international routes remain part of the longer-term strategy, but current conditions may delay implementation.

Source: Pakistan Today