Air India warns of $600 million loss from Pakistan airspace ban

Carrier seeks government support as rerouted flights raise fuel costs, extend travel times, and disrupt long-haul operations

NEW DELHI, India (MNTV) — Air India has warned that Pakistan’s closure of its airspace to Indian carriers could cost the airline nearly $600 million over the course of a year, according to a letter submitted to India’s civil aviation ministry and reviewed by Reuters.

The restriction, imposed after a deadly attack on tourists in Indian-administered Kashmir last week, has forced Indian airlines to reroute long-haul flights, increasing fuel consumption and travel times. 

The April 22 attack in Pahalgam killed 26 people, including a foreign national from Nepal, prompting a sharp escalation in cross-border tensions.

In a letter dated Sunday, Air India proposed a government-backed subsidy model to offset anticipated losses. 

The Tata Group-owned carrier estimates additional costs of over 50 billion Indian rupees ($591 million) if the ban persists for a full year.

The airspace closure has particularly affected Air India’s routes to Europe, North America, and Canada, which typically pass over Pakistani territory. 

The airline currently holds a 26.5 percent share of India’s aviation market.

Air India, which posted a $520 million net loss in the 2023–24 fiscal year, is undergoing a major restructuring program following its privatization. 

Its expansion plans are already facing headwinds due to delays in aircraft deliveries from Boeing and Airbus.

India’s civil aviation ministry is reportedly working with domestic carriers to explore alternate flight corridors, including routes over mountainous terrain near China. 

According to Reuters, Air India has also requested that the Indian government seek overflight clearances from Chinese authorities.

In parallel, Indian officials are considering temporary tax relief or other policy interventions to cushion the broader aviation sector from the ongoing disruption.