Air India expects an extra $600 million in costs if Pakistan’s airspace remains closed to Indian airlines for a year, and has sought compensation from the central government, according to a letter from the airline obtained by Reuters.
Airline carriers from India make arrangements to handle increased fuel costs and longer flight times because Pakistan shut down its airspace after a terror strike in Pahalgam, Kashmir, last week that killed 28 people, including one Nepalese national. Air India issued a letter to the Indian civil aviation ministry providing a detailed analysis of the financial losses exceeding 50 billion Indian rupees, which would accumulate annually during the flight ban period, according to Reuters, which obtained a copy of this letter.
As quoted by the Times of India, the letter mentioned, “Subsidy for affected international flights is a good, verifiable and fair option … the subsidy can be removed when the situation improves.”
It also mentioned, “The impact on Air India is maximum due to airspace closure, due to additional fuel burn…additional crew.”
Air India operated by Tata Group attempts to improve its financial situation after state ownership but encounters operating restrictions because Boeing and Airbus extend delivery schedules for new aircraft.
Operating with $4.6 billion in revenue, the airline reported a net loss of $520 million in the 2023-2024 fiscal year. Air India maintains 26.5% of the Indian market through its flight routes across Europe and the United States and Canada, while always navigating airspace owned by Pakistan. The airline accesses a much larger network of international routes that exceeds the domestic operations of IndiGo. The three airlines, IndiGo together with Air India and Air India Express, maintained a total route network of 1,200 scheduled flights departing from New Delhi to Europe, and Middle East, and North America throughout April, according to Cirium Ascend data.
The government of India actively works to reduce the negative effects the closure of Pakistani airspace has on the aviation industry. Reuters sources confirmed that Indian carriers worked together with the civil aviation ministry to find solutions that involved flying through difficult Chinese regions as well as seeking tax deductions. The Air India letter to the government requested Chinese authority help for specific flight clearance without specifying details. The company needed authorization to send additional pilots who would operate flights to the United States and Canada to handle longer journey durations.
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