Bad news for people looking to travel abroad as all airlines have announced a substantial hike in the federal excise duty (FED) on tickets for international flights, effective from July 1. This increase follows the federal government’s recent budget announcement.
The new rates have been implemented by all major airlines, including Pakistan International Airlines (PIA), Saudi Air, and Emirates. The adjustment sees a 150% increase in the FED for economy and economy plus tickets. Consequently, passengers who were previously paying Rs5,000 in FED for economy tickets will now be required to pay Rs12,500.
The impact is also severe on premium-class travelers. The FED for Club Class tickets to the USA has risen dramatically, from Rs250,000 to Rs350,000. Similarly, duty on tickets to African and Middle Eastern destinations has increased from Rs75,000 to Rs105,000.
For flights to European cities, the FED has been elevated from Rs150,000 to Rs210,000. Travelers heading to Australia, New Zealand, and Far Eastern countries will now face a 40% increase, with the duty amounting to Rs210,000.
This rise in FED is expected to have a substantial impact on travel budgets and could deter many from flying internationally. Airlines have been swift to adjust their ticket pricing to reflect the new duties, affecting passengers booking tickets from July 1 onwards.
Travel industry experts anticipate that this sharp increase in FED could lead to a decline in international travel demand, particularly among price-sensitive travelers. The increase comes at a time when the travel industry is still recovering from the effects of the COVID-19 pandemic, making the hike particularly burdensome for both airlines and passengers.
The government’s decision to increase the FED is part of broader fiscal measures aimed at boosting revenue. However, it remains to be seen how this move will affect overall travel patterns and the aviation sector’s recovery in the coming months.
