Government Increases FED on Business Class Air Tickets, Passengers to Face Higher Travel Costs

The government has increased the Prices of business class, first class, and club class air tickets by imposing excise and tax duties based on international regions/destinations. After the mini-budget passed in 2023 the government increased the price of everything. New rates of FED would be applicable on business class and first-class air tickets issued after the date of commencement of the finance bill 2023. The new rate of FED will be RS 250,000 on the decided ticket of traffic conference area-1 which is (north, central, and South America and environs).

Comparing the second rate of FED it would be RS 75,000 on the decided tickets by traffic conference area -2 (Middle East and Africa). The Price of FED for area 2 Europe will be 150,000 and 150,000 for area 3 (Far East, Australia, New Zealand, and the pacific islands). The senate rather than imposing a 20 percent tax on international flight define a fixed amount of tax for different areas. Earlier the bill passed in 2023 for finance supplementary increase FED on air tickets for business, first class, and club class. Proposed FED to be 20 percent for GAT or RS 20,000 per ticket which is also higher.

The International Air Transport Association IATA a trade association for the world airlines represents 300 airline traffic. The government of Pakistan has blocked foreign airlines from the recovery of $225 million funds. Willie Walsh IATA director general on December 7 gave an argument that was made in a bid to convince the government of Pakistan and those in other similar countries such as Nigeria and Bangladesh to end their doing but government officials have to take this matter and focused airlines to taken this matter into their own hands.

Financial targets airlines create different fairs for classes for each flight. It can be challenging for frequent travelers. Especially the fare class segments each seat into specific categories depending on different prices and rules. Some fare classes are code universal while others are specific to individual airlines. As to keep the rupee afloat the government has increased the pieces of international flights depending on different areas. Airlines look to brief customers by offering different prices to the local travel agent in a bid to price them out and redirect spending.

Shahzaib Dyer
Shahzaib Dyer
Shahzaib is content writer with over five years of professional experience. He is creative, hardworking, and possess extensive research skills. Being analytical in approach is highly reflected in his writing.


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