GURUGRAM- Air India (AI) could incur additional costs of approximately 5,029.2 Cr INR over the next 12 months due to Pakistan’s continued ban on Indian carriers using its airspace, requesting compensation from the Indian government.
The ban, imposed after India suspended the Indus Waters Treaty in response to a deadly attack on tourists in Pahalgam, Kashmir, has forced Indian airlines to reroute international flights, impacting major hubs like New Delhi (DEL) and destinations across Europe and North America.
Photo: Utkarsh Thakkar (Vimanspotter)Air India Seeks Rs. 5,000 Cr Compensation
Pakistan’s decision to close its airspace to Indian carriers, including Air India (AI), stems from heightened tensions following a deadly attack on tourists in Kashmir’s Pahalgam on April 22, 2025.
The ban, effective immediately, forces airlines to reroute flights, significantly impacting Air India’s long-haul operations to Europe, the United States, and Canada.
According to Reuters, Air India estimates an annual loss of over ₹5,029.2 crore ($600 million) if the ban persists for a year, driven by increased fuel consumption and extended flight times, requesting compensation.
The airline’s letter to the Civil Aviation Ministry, dated April 27, 2025, highlights the disproportionate impact on Air India due to its extensive international network.
The letter notes, “The impact on Air India is maximum due to airspace closure, due to additional fuel burn…additional crew.”
This closure disrupts approximately 1,200 flights from New Delhi (DEL) to Europe, the Middle East, and North America in April alone, operated by Air India, its budget unit Air India Express, and rival IndiGo (6E).
Air India, holding a 26.5% market share in India, operates more long-haul routes than IndiGo, making it particularly vulnerable.
The Tata Group-owned carrier, already navigating a multi-billion-rupee turnaround, reported a net loss of ₹4,358.64 crore in fiscal 2023-2024 on sales of ₹385,572 crore.
Jet delivery delays from Boeing and Airbus further constrain its growth, compounding the financial strain from the airspace ban.
Photo: Mumbai Planes | Siddh DhuriGovernment Response
The Indian government is actively exploring solutions to alleviate the aviation sector’s burden.
Sources indicate that Indian carriers, including Air India (AI), met with the Civil Aviation Ministry to discuss alternatives, such as rerouting flights over challenging terrain near China and implementing tax exemptions.
Air India’s letter specifically requested government assistance in securing overflight clearances from Chinese authorities, though details remain undisclosed.
Additionally, Air India proposed carrying extra pilots on flights to the United States and Canada to manage longer travel times, seeking government approval for this measure.
The government’s proactive engagement follows its request for airlines to assess the ban’s impact, with Civil Aviation Minister K Ram Mohan Naidu emphasizing minimal disruption for passengers.
Photo: By lasta29 – Air India, B787-8 Dreamliner, VT-ANR, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=40687689Past Precedents
The airspace closure forces Air India (AI) to reroute flights, adding 15 minutes to several hours to journey times, depending on the destination.
For instance, flights from New Delhi (DEL) to the Middle East now take about an hour longer, reducing cargo capacity and increasing fuel costs, which account for roughly 30% of an airline’s operating expenses.
Ultra-long-haul flights to North America have resorted to technical halts in European airports like Copenhagen and Vienna for refueling or crew changes, disrupting non-stop schedules.
This is not the first time Pakistan has imposed such a ban. In 2019, following the Balakot airstrikes, a five-month airspace closure cost Indian airlines, including Air India, approximately ₹536.45 crore at current rates.
Air India bore the brunt due to its extensive westbound routes. The current ban, set to last until at least May 23, 2025, could lead to similar or greater losses if prolonged.
Photo: avgeekwithlens/ Harsh TekriwalRecovery Challenges
This development comes as Air India is navigating a multi-billion-rupee restructuring plan after decades of state ownership.
The airline’s efforts to modernize its fleet have already been hampered by delivery delays from Boeing and Airbus, limiting its capacity to expand and adapt to changing route demands.
While the Indian Civil Aviation Ministry has yet to issue an official response, reports suggest policymakers are exploring all possible avenues to cushion the economic blow. The long-term success of these efforts will hinge on diplomatic progress and operational flexibility.
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India has Leverage Over Pakistan in Airspace Control
The post Air India Seeks Rs.5,000 Cr Compensation Amid Pakistan Airspace Ban appeared first on Aviation A2Z.
