By Staff Reporter
ISLAMABAD: Pakistan International Airlines Ltd. is suspending flights to Beijing, Kuala Lumpur and most destinations in the Gulf, while sharply restricting service to the United Arab Emirates, as the carrier grapples with the fourth consecutive surge in jet-fuel prices triggered by the US-Israeli war on Iran.
The airline will cut operations to the UAE to 16 flights a week and suspend service to other Gulf countries, except Saudi Arabia and the UAE, until the end of April, it said on Monday. Flights to Beijing will be halted from April 11 and to Kuala Lumpur from April 14. All routes will be restored once international fuel prices normalize, the carrier added.
“The PIA management has taken the decision in the context of the fourth increase in expensive jet fuel,” the airline said in a statement. “The entire burden of fuel prices cannot be put on passengers, so some strict administrative decisions have been taken.”
Jet fuel has jumped from $85-$90 a barrel to $150-$200 in recent weeks, according to the airline, after the conflict that began Feb. 28 disrupted global energy supplies and cargo flows through the Strait of Hormuz. Last week, jet fuel averaged $195 a barrel, more than double the average a year earlier, data from the International Air Transport Association show. In Pakistan, the price rose Rs40 on Friday to Rs517.17 a liter, local media reported, citing aviation sources.
Fuel typically accounts for as much as a quarter of an airline’s operating costs. The carrier said it can no longer absorb the full impact of the increases without taking “principled” steps to protect its finances. As part of the cost-saving measures, PIA has eliminated all passenger discounts except those for children and infants. Concessions previously extended to students, bankers, senior citizens, journalists, retired military personnel and members of the Airports Security Force have been scrapped. “It is hoped that prices will soon return to normal at the international level, after which all affected routes will be restored,” the airline said.
The moves come just months after PIA was privatised in December, when a consortium led by Arif Habib Group acquired a 75% stake for Rs135 billion, valuing the airline at Rs180 billion. The debt-laden carrier had racked up more than $2.8 billion in losses, and the sale was billed by the government as its most ambitious attempt in decades to end decades of state-funded bailouts and revive the flag carrier.
Last week, Arif Habib, chairman of the PIA consortium, warned that the 150% surge in jet-fuel rates threatened the sustainability of the airline’s operations and urged the government to reverse the increase. The latest round of cuts marks the most significant operational retrenchment since privatisation and underscores the immediate pressure the new owners face from volatile energy markets.
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