Airlines are raising international ticket prices significantly following the introduction of a new tax
Bad news for travelers planning trips abroad as all airlines have announced a significant rise in the federal excise duty (FED) on international flight tickets, effective from July 1. This increase follows the recent budget announcement by the federal government.
The new rates have been implemented by major airlines like Pakistan International Airlines (PIA), Saudi Air, and Emirates. Economy and economy plus tickets now face a 150% increase in FED. Previously, passengers paying Rs5,000 in FED for economy tickets will now pay Rs12,500.
Premium-class travelers are also affected, with FED for Club Class tickets to the USA rising from Rs250,000 to Rs350,000. Similarly, FED on tickets to African and Middle Eastern destinations has gone up from Rs75,000 to Rs105,000.
For flights to European cities, the FED has increased from Rs150,000 to Rs210,000. Travelers heading to Australia, New Zealand, and Far Eastern countries now face a 40% increase, with the duty amounting to Rs210,000.
This rise in FED is expected to significantly impact travel budgets and may discourage many from flying internationally. Airlines have quickly adjusted their ticket prices to accommodate the new duties, affecting passengers booking tickets from July 1 onwards.
Experts in the travel industry anticipate a decline in international travel demand, especially among budget-conscious travelers, due to this sharp increase in FED. The timing is challenging as the travel sector is still recovering from the COVID-19 pandemic, making the hike particularly burdensome for both airlines and passengers alike.
The government’s decision to raise FED is part of broader fiscal measures aimed at increasing revenue. However, its implications for travel patterns and the recovery of the aviation sector remain to be seen in the coming months.
