The Ministry of Finance is considering a proposal to slash high taxes on airline tickets to enable the Pakistan International Airlines (PIA) maintain the fares at reasonable limits, an official source told Business Recorder here on Monday.
The Ministry of Defence has forwarded the proposal in view of the negative impact of increasing fuel prices and intermittent raise in airline fares covering domestic and international sectors.
For some time, the domestic fares have remained stable in view of tough competition among the private sector airlines and PIA. The international tariff was reviewed upwards by PIA late last week on the plea of meeting the cost of ever-increasing fuel prices. The actual burden in fact falls on the ticket-holder and it is he who, per force, co-shares the cost.
If the government taxes are reduced, the impact of increase in fuel prices may also be less and travelling public saved from the agony of paying unbearable fares.
Aviation experts suggest that PIA could contain its losses to a considerable extent, if it were to follow International Air Transport Association's (IATA's) Fuel Action programme.
IATA has launched a Fuel Action Campaign (FAC) to supplement its existing fuel activities to assist airlines combat the severe impact of rising fuel prices.
IATA believes: "While we cannot influence the commodity price of oil, we can take measures to reduce the amount of fuel consumed, simplify business practices, reduce duties, fees and taxes and improve market conditions." IATA is working with industry partners world-wide to reduce the industry's fuel requirements and associated environmental emissions.
In addition, it is working with individual airlines to ensure that they have a robust internal "fuel conservation programme" in place. "Opening of new more direct routes, realignment of inefficient routes and improved ground traffic flows can reduce industry costs by 2.5 billion dollars per year," it estimates.
Further airlines individual efforts to improve their own operating efficiencies can yield significant savings. Each percent improvement in fuel efficiency across the industry can lower fuel costs by 700 million dollars per year.
Greater priority is being given to ongoing initiatives to increase competition among fuel suppliers at local levels and to challenge unreasonable and potentially illegal duties, fees and taxes where they exist.
To simplify the business, IATA is working with airlines and industry partners to establish and adopt industry data standards, make fuel management technology more effective, affordable and easier to deploy, and take advantage of shared services where permissible.
To help airlines better control fuel costs, it is also working with leading global banks to expand credit and reduce costs associated with hedging activities.
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