PIA to charge fares in US dollars from August 12
Passengers booking tickets in Pakistan will pay more due to weak rupee.
Pakistan International Airlines (PIA) has decided to fix its airfares in US dollars from August 12 as advised by the International Air Transport Association (Iata), Khaleej Times has learnt.
According to the PIA's directive to travel agents and sales outlets, the airline has approved the 'filing of fares in the US dollar' of all ex-Pakistan domestic flights, as well as international current fares, penalties and charges; these will be converted from the Pakistani rupee to the US currency with effect from August 12.
Other airlines in the private sector will also follow the Iata directive and will charge airfares in US dollar or in Pakistani rupee equivalent to the US currency at the time of booking.
"All ex-Pakistan fares will be approved and filed in the US dollar, but will be reflected on the ticket in local currency by converting at system exchange rate. Whenever there's any fluctuation in the currency, the fares in Pakistan rupee will automatically be updated," the statement said.
When contacted, PIA's manager for public affairs Athar Hasan confirmed the news and said the decision is taken following a recent Iata directive to ensure best international practices in the airline industry.
To a question about how exchange rate will be calculated, he said the Iata-consolidated exchange rate will be considered to convert the US dollar fare amount to the rupee equivalent.
"The new fare structure will be effective from August 12 and passengers will be able to check prices in the US dollar and Pakistan rupee on the airline's website," Hasan said.
Travel agents said the latest move will increase airfares on Pakistani routes due to a weak rupee as it is evident with the approximately 50 per cent devaluation since December 2017. However, passengers who book tickets outside will get the advantage of competitive rates.
Saj Ahmad, an analyst at London-based StrategicAero Research, says this is an interesting move by PIA, especially when you consider the weakness of the rupee, which has continued to lose value against the greenback and the British pound.
"At one end, the costs for those passengers flying to Pakistan from places like the US and Europe, fares may actually prove to be competitive and not see escalation," he said.
On the flip side, he said passengers buying tickets in Pakistan will almost certainly see higher fares; the rupee has fallen so dramatically, so you get fewer dollars in exchange.
"Now unless PIA takes the drastic measure to refine its fare structure to offset the weaker home currency, demand from within Pakistan will take a hit and in a big way. Let's face it, there is far better-quality airline service to be had flying out of Pakistan by using Emirates, Etihad Airways and now even British Airways as well as Serene Air for domestic services," Ahmad said.
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