Airline ticket prices set to increase amid surge in jet fuel prices

ISLAMABAD: Pakistan will experience a significant rise in airline ticket prices because the government increased jet fuel costs by Rs154 per litre, which brought aviation fuel prices to their all-time maximum.

The government announced its latest notification that Jet A-1 aviation fuel now costs Rs. 342.37 per litre after rising from its previous price of Rs. 188.93, which constitutes an 82 percent price increase.

The sudden increase in costs will require domestic and international airlines to pay higher operational expenses for their flights to and from Pakistan.

The new decision follows the government’s implementation of petrol and diesel price hikes, which raised costs by Rs55 per litre to address rising global crude oil prices and upcoming supply chain problems.

The fuel cost increase will create double-digit growth in operating costs for airlines because experts predict that ticket prices will reach Rs5,000 for both domestic and international flights within the next few days.

Industry experts warn that the sharp rise in aviation fuel costs — one of the largest expenses for airlines — could soon translate into higher ticket prices. Airlines operating in Pakistan may increase airfares by up to Rs5,000 on domestic and international routes to offset the additional cost burden.

Aviation fuel typically accounts for 30 to 40 percent of an airline’s operational expenses, which means that any operational changes will result in immediate financial effects for airlines.

Pakistan’s aviation industry needs to postpone its recovery from the pandemic and economic challenges because global oil prices show no signs of decreasing. Market observers say further adjustments in fuel prices cannot be ruled out if tensions in the Middle East continue to rise.