Air India anticipates facing approximately $600 million in additional expenses if the ban on using Pakistan’s airspace persists for a year and has requested the federal government to compensate for this financial impact, according to a company letter seen by Reuters.
Indian airlines are preparing for increased fuel costs and longer travel durations following Pakistan’s decision to close its airspace to the country’s carriers. This move was a reciprocal action taken after an attack on tourists in Indian Illegally Occupied Jammu and Kashmir (IIOJK) last week.
In a letter dated April 27 and addressed to the Civil Aviation Ministry, Air India asked the Indian government for a “subsidy model” proportionate to the economic losses incurred. The airline estimates losses exceeding 50 billion Indian rupees ($591 million) for each year the airspace ban remains in effect, as reported by Reuters.
“A subsidy for affected international flights is a viable, verifiable, and equitable solution… this subsidy can be discontinued once the situation improves,” the letter stated.
“Air India is experiencing the most significant impact due to the airspace closure, resulting from increased fuel consumption… and the need for additional crew.”
Air India declined to comment on the matter. India’s Civil Aviation Ministry did not immediately respond to a request for comment.
A source with direct knowledge indicated that Air India’s letter was sent after the government instructed its executives to evaluate the consequences of the airspace ban on Indian carriers.
The Tata Group-owned airline is currently undergoing a multibillion-dollar turnaround following a period of government ownership. Its growth is already hampered by delays in jet deliveries from Boeing and Airbus. The airline reported a net loss of $520 million in fiscal year 2023-2024, with sales amounting to $4.6 billion.
Air India, which holds a 26.5% market share in India, operates flights to Europe, the United States, and Canada, frequently traversing Pakistani airspace. It manages a significantly larger number of long-haul routes compared to its primary domestic competitor, IndiGo.
Data from Cirium Ascend reveals that IndiGo, Air India, and its budget subsidiary Air India Express had a combined total of approximately 1,200 flights scheduled from New Delhi to Europe, the Middle East, and North America in April.
Three other individuals familiar with the matter disclosed that the Indian government is exploring various options to mitigate the impact of Pakistan’s airspace closure on the airline industry.
One of these sources mentioned that Indian carriers met with the Civil Aviation Ministry to discuss potential solutions, including rerouting flights over more challenging terrain closer to China and considering certain tax exemptions.
In its letter, Air India requested the government to engage with Chinese authorities to secure necessary overflight clearances, without providing specific details.
The airline also asked the government to approve the inclusion of extra pilots on flights to the United States and Canada to accommodate the extended travel times.
