Private Airlines' fare hike sparks cartel fears amidst PIAC's operational challenges

October 28, 2023 (MLN): Amidst Pakistan International Airlines Corporation's (PIAC) operational challenges, it appears that private airlines have formed a cartel, with fares for a single flight ranging from 38,000 to 43,000.

In today's investigation conducted by Mettis Link News, we reached out to spokespersons from various private airlines and the fares they quoted indicate a significant increase compared to last week.

This contradicts the findings from last week's inquiry which showed that the private airlines were charging a range of Rs17,000 to Rs19,000 for a one-way ticket from Karachi to Islamabad.

While the national carrier, PIA, provided a fare of Rs44,000 for the same round-trip route.

PIAC, due to its fuel shortage, is experiencing delayed flights and flight cancellations.

As a result, passengers have moved towards private airlines and this has increased their demand.

Thus, Private airlines have begun capitalizing on the operational issues of the national carrier and are cooperatively charging higher fares due to increased demand.

This calls for immediate action from the relevant authorities to regulate these private airlines, ensuring fair pricing and protecting the interests of the public.

Failure to address these issues will create an economic imbalance and lead to further cartelization, especially if a government entity like PIA encounters operational challenges.

Moreover, it is essential to create a competitive and equitable market environment to safeguard the welfare of citizens.

It is important to mention that the Economic Coordination Committee (ECC) on Friday approved the proposal for bridge financing worth Rs8 billion for PIAC through the Civil Aviation Authority's (CAA) resources to address urgent requirements related to overdue payments.

Moreover, this week, PIAC resumed some of the flights after making partial payments to Pakistan State Oil (PSX: PSO) for the supply of jet fuel.

PIAC has been facing a severe financial crisis due to its mounting debt.

The national carrier has a substantial outstanding debt to PSO, which is a crucial factor in maintaining a steady supply of jet fuel for its operations.

According to sources, PSO supplied fuel worth Rs3.45 billion to PIA from October 1 to October 18, 2023.

However, PIA failed to settle its dues, which prompted PSO to suspend the fuel supply, which, in turn, resulted in the cancelation of several PIA flights.

Copyright Mettis Link News