PIA increases fuel surcharge by 50 per cent

Air passengers have been hit with sharp fuel surcharges, as cost of traveling on Pakistan International Airlines (PIA) flights has increased exponentially. PIA has increased the fuel surcharge by 50 per cent on domestic and international flights with effect from November 5, 2011 while other domestic airlines, Airblue and Shaheen Airways, are yet to decide on a possible surcharge. Aviation experts say there is no valid justification for imposing fuel surcharge at a time when oil prices have begun to stabilise in the international market. Most of the international airlines had announced cuts in fuel surcharge. All-Nippon Airways, Cathay Pacific and Singapore Airlines set the precedent and followed by other airlines. Some believe that by imposing additional fuel surcharges, PIA has paved the perfect way for upcoming airlines such as, Air Indus and Bhoja Air, to flourish their business on domestic routes at the cost of exchequer. “Fuel surcharges are being added on airline tickets to partially recover the increase in operational costs due to fluctuations in jet fuel prices. Airlines often include fuel surcharges on top of base fare in order to cover increasing fuel prices because it is easy to add and remove fuel surcharges when prices increase or go down,” said Shah Murad, an aviation lawyer. “International airlines began adding fuel surcharges on international routes in 2008 when oil prices hit a record high of $147 a barrel,” said Murad. Despite knowing all this, surprisingly, PIA has imposed additional fuel surcharges without any legitimate reason to make up for lost profits. Now due to exorbitant fare increase, air traveler would not prefer to travel on PIA flights which will definitely create financial troubles for ailing airline. Ironically, base fares of PIA are already higher as compared to other domestic and international airlines. In current year, this is the second time PIA has imposed fuel surcharges. In April, 2011 Pakistan International Airlines (PIA) had also increased the fuel surcharge due to the soaring prices of the oil in international market. PIA has increased $40 at one-way ticket for US and Canada under fuel surcharge head, for other European countries including Britain $20 and $10 have been increased for Middle East, India and Far East countries. Besides, Rs150 to Rs300 have been added up to the one-way tickets for domestic flights. In May, 2011 the Board of Directors of PIA took decision to link fuel surcharge to oil prices in international market. It is common in the airline industry that fuel surcharge may rise, fall or removed, subject to fuel prices however, in case of PIA, even fuel prices go down, but airfare will remain unchanged. PIA has never cut fuel surcharge despite declining fuel prices in the international market. Fuel costs constitute approximately 45 per cent of the total operating cost of PIA flight operations.