Foreign Airlines in Pakistan Accused of $2.4bn Outflow
Foreign airlines in Pakistan moved between $2 billion and $2.4 billion abroad each year through ticket sales settled via offshore payment gateways, the Aircraft Owners and Operators Association (AOOA) has claimed.
The association called for a five-year forensic tax audit of all airlines operating in the country and curbs on ticket payments through foreign gateways. It set out the demand in a letter to Finance Minister Muhammad Aurangzeb on Wednesday.
AOOA founder Imran Aslam Khan signed the letter, which said billions of dollars in ticket revenue bypassed domestic financial channels and stayed largely invisible to local tax authorities.
Foreign airlines in Pakistan: the numbers behind the claim
The association estimated annual airline ticket sales in Pakistan at between $3.2 billion and $3.6 billion, but said only a fraction of that revenue passed through domestic financial channels.
Pakistan International Airlines (PIA) accounted for about $750 million of the revenue, while other domestic carriers generated a combined $65 million. Officially recorded foreign remittances stood between $80 million and $411 million.
“Combined, these documented streams with maximum amount remitted it totals to USD 1.226 billion, leaving an unaccounted gap of $2 to 2.4 billion every year,” the letter said.
The association added that the $3.2 billion to $3.6 billion estimate could be conservative. It cited recent market analyses suggesting Pakistan’s broader flight market generated more than $6 billion a year.
Around 40 to 42 scheduled airlines operate through Pakistan’s international and domestic airports, the letter said. Four are active domestic carriers and about 36 or 37 are foreign. Foreign carriers alone account for nearly two-thirds of Pakistan’s international ticket revenue, with leading international operators earning hundreds of millions of dollars each from routes serving the country.
What the association wants
The letter proposed a four-point framework to stop what it called financial leakages and improve tax compliance in aviation.
First, all ticket sales for journeys starting or ending in Pakistan should pass only through payment gateways regulated by the State Bank of Pakistan (SBP).
Second, Federal Board of Revenue (FBR) tax collection should sit inside the payment process. Ticket purchases should run through an FBR collection mechanism built into Pakistan’s payment gateway, with “zero exemptions permitted”.
Third, airlines should submit verified passenger and sales manifests for every flight directly to the FBR through an automated electronic reporting system.
Fourth, the government should appoint three leading international auditing firms to run separate forensic tax audits covering the previous five years.
“Any identified shortfalls must be recovered immediately to deter future evasion and establish an airtight tax regime,” the letter said.
Why the claim matters for the economy
Pakistan is short of foreign exchange, and the sums in the letter are large next to the country’s reserves. The government paid $3.24 billion in foreign debt interest in a recent period, and the FBR missed its four-month tax target by Rs94 billion.
The centre has also deducted Rs35 billion from provincial grants, which shows how tight public money is. Against that background, a claim of $2 billion or more leaving the country each year through one sector will draw attention in Islamabad.
The figures are the association’s estimates, not official data, and the airlines named in the letter have not yet responded in public. The finance ministry has also not yet replied to the letter. If the government acts on the call, the first step would be an audit, not a penalty, and the audit would test whether the gap is real.
The claim also lands as PIA’s future stays in focus. Pakistan has rejected expensive LNG cargoes to save foreign exchange, and the government raised Rs70 billion through a sukuk auction this week. Every dollar of revenue that stays inside the banking system helps the reserves position.
Frequently asked questions
How much money do foreign airlines move out of Pakistan each year?
The AOOA claims foreign airlines move between $2 billion and $2.4 billion abroad each year through offshore payment gateways.
What has the AOOA asked the government to do?
It wants a five-year forensic tax audit of all airlines, SBP-regulated payment gateways for ticket sales, FBR tax collection inside the payment process, and verified flight manifests sent to the FBR.
How large is Pakistan’s airline ticket market?
The association puts annual ticket sales at $3.2 billion to $3.6 billion, and cites analyses suggesting the broader flight market exceeds $6 billion a year.
How many airlines operate in Pakistan?
Around 40 to 42 scheduled airlines operate in Pakistan, including four active domestic carriers and about 36 or 37 foreign carriers.
