Foreign airlines relax restrictions on Pakistan

KARACHI: Foreign airlines have announced relaxation in restrictions and conditions imposed on Pakistan, according to industry sources. Some time ago, the issuance of tickets by airlines from Pakistan was stopped due to non-transfer of remittances from Pakistan. Now they have announced lifting the ban after May 31.

According to travel industry sources, these airlines have informed their agents about an end to the ban, which will significantly reduce fares on international routes. The ticket will become cheaper by Rs200,000-250,000. The government had made it necessary for all industries to get permission from the State Bank before sending foreign exchange out to prevent a decrease in foreign exchange reserves. The decision not only badly affected domestic imports but also the travel industry. Due to lack of remittances, airlines changed their policies for the Pakistan market and imposed strict conditions. Under these conditions, if the tickets were bought from Pakistan for the same sector, the rate was much higher than the ticket bought from abroad. There was a big difference due to which the number of people buying tickets from Pakistan decreased by 70 to 80 percent. The Travel Agents Association had claimed that due to the increase in airline fares, 60pc of Pakistan’s travel business had shifted to other regions and to the airlines’ own websites in Pakistan.

There is hope to get out of the crisis, sources say, adding that the tickets will now be cheaper. An airline, which recently started its operations from Pakistan, has decreased its fare from Karachi to New York by Rs300,000, which had reached Rs600,000. Sources say reasons behind high fares were the devaluation of the rupee, additional tax imposed by the government and bans by foreign airlines. However, major reasons are still there. The new tax levied by the government increased the financial guarantee provided by IATA by 20pc. Charges for bank guarantee also increased. The cost has also increased and added to the tickets. In this scenario, the viability of the travel and tour business is rapidly decreasing. The central excise duty imposed on first and business class tickets has also affected travel agents to a great extent. The fares on the routes have increased by 150 to 200 percent. A business class ticket from Karachi to New York, which cost Rs600,000-700,000 a year ago, is available at Rs1.8-1.9 million. A ticket to the UK from Karachi costs Rs900,000. According to industry sources, if the depreciation of rupee continues, fares will further increase.