The chairman of the Arif Habib Group, which leads the consortium holding a 75 percent stake in Pakistan International Airlines (PIA), has issued a stark warning about the airline’s future. Arif Habib stated on Saturday that the sharp increase in jet fuel prices could render flight operations unsustainable, raising serious concerns about the ongoing privatisation of the national carrier.
Habib highlighted that the surge in domestic jet fuel costs has placed PIA at a considerable disadvantage compared to international competitors. He emphasized that operating the airline under the current fuel price regime is not feasible, noting that local fuel prices have escalated disproportionately relative to global trends.
This cautionary statement arrives as the consortium prepares to assume full operational control of PIA next month. The aviation sector in Pakistan has been broadly affected by rising energy costs, a consequence of global market disruptions linked to recent geopolitical tensions in the Middle East.
Habib, jet fuel prices in Pakistan have surged dramatically from approximately Rs180 ($0.65) per litre to over Rs400 ($1.43) within just one month. This steep increase has sparked concern within government circles.
A recent Cabinet Committee meeting, chaired by Finance Minister Muhammad Aurangzeb, acknowledged that escalating fuel costs are eroding the competitiveness of domestic airlines and causing a shift in market share toward foreign carriers.
In response, Habib urged the government to intervene by adjusting refining margins to align fuel prices with regional standards. He warned that the current pricing structure poses an existential threat to PIA’s recovery efforts, stressing that no business can sustain prolonged losses. Habib also indicated plans to raise this critical issue directly with Prime Minister Shehbaz Sharif.
The privatisation of PIA forms a central part of Pakistan’s economic reform agenda under a $7 billion International Monetary Fund (IMF) support package. Established in 1955, PIA was once a leading airline in Asia but has suffered a decline due to political interference, financial mismanagement, and staffing inefficiencies.
Notably, the airline was banned from European and British airspace for four years following a 2020 scandal involving questionable pilot licensing credentials.
The consortium led by Arif Habib acquired the majority stake in December for 135 billion rupees ($485 million), with plans to modernize the fleet and restore international routes to key destinations such as London and Paris.
Despite the pressure from rising fuel costs, Habib assured that PIA has not grounded any aircraft and remains committed to fulfilling its contractual and international obligations. However, he underscored that the airline’s long-term sustainability hinges on the establishment of a more rational domestic fuel pricing mechanism.
