The Taliban is a group of fundamentalist Sunni Muslims who want to make Afghanistan an Islamic state. In the past, they have banned women from public life and forced all men to grow beards. They also forbid music and television.
The aviation news is an article that discusses the Taliban discovering the limits of Islamic airline economics.
The Taliban Has Discovered The Economic Limits Of Islamic Airlines
on October 16, 2021 by Gary Leff
My main lesson from Timur Kuran’s 2011 book The Long Divergence is that nations in the Middle East that have interpreted Islamic economic law the most liberally have fared the best economically, while rigid adherence to items like interest prohibitions stifles growth.
Now that they’ve transitioned from insurgent force to managing institutions of government, the Taliban is learning the limitations of Islamic economics as it interacts with foreign air service from Kabul. Scarcity arises as a result of price restrictions.
- Since the Taliban took control of Kabul, Pakistan Foreign Airlines has been the sole international airline operating regular flights from the capital.
- It’s difficult to do business in Kabul. It’s also dangerous. They’ll have to pay a lot of money in insurance premiums.
- Flight costs have increased by more than tenfold while the previous administration was in office and the US military provided stability.
- The Taliban have ordered the airline to slash its rates by 90% or more, bringing them back to previous levels.
- As a result, the airline has canceled its planned Kabul flights.
“Our flights were often delayed owing to the unprofessional attitude of the Kabul aviation authority,” PIA spokesperson Abdullah Hafeez Khan told the AFP news agency. … According to an AFP source, Taliban officials were often “derogatory” and once “physically manhandled” a member of the airline’s employees.
…The Afghan transport ministry stated in a statement that fares on the route should “be modified to comply with the requirements of a ticket before the Islamic Emirate’s triumph” or flights would be halted. Passengers and others were asked to report any breaches.
The Taliban’s early experience should also be seen as a harsh rebuke to populist politics. They want to win over their median constituency even as they struggle to keep regular access to electricity, but their ability to do so is limited by the fact that scarcity and pricing aren’t just cabals of powerful interests working against the people; they reflect the economic reality imposed by risk and uncertainty created by the Taliban themselves.
Simply put, a foreign airline servicing Kabul has a risk premium, and any airline must be paid for it. They must provide air service that fills aircraft at high enough rates to cover increased expenses while still delivering above-average returns, or the airline will be better off deploying its planes elsewhere. Airline costs will rise, and income will be limited, resulting in fewer flights.
To put it another way, you’re doing something wrong when you lose probably the worst airline in the world, which is state-owned and supported by a political government that has been generally supportive of your revolution.
(Image courtesy of Live and Let’s Fly)
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