Air India hopes to face around $ 600 million in additional costs if a prohibition of Pakistan airspace lasts a year, and has asked the federal government to compensate for the coup, a letter from the company seen by Reuters Shows.
Indian airlines are preparing for higher fuel costs and longer travel times after Pakistan closed their airspace to the country’s aircraft carriers in a tit-for-ot retaliation after an attack against tourists in Kashmir last week.
On April 27, Air India asked the Indian Government for a “subsidy model” proportional to the economic blow, estimating a loss of more than 50 billion Indian rupees ($ 591 million) for each year that the prohibition lasts, according to a letter sent by the airline to the civil aviation ministry observed by Reuters.
“The subsidy for affected international flights is a good, verifiable and fair option … the subsidy can be eliminated when the situation improves,” said the letter.
“The impact on Air India is maximum due to the closure of the airspace, due to additional fuel burn … additional crew.”
Air India declined to comment. The Ministry of Civil Aviation of India did not immediately respond to a request for comments.
Air India letter was sent after the Government asked its executives to evaluate the impact of airspace ban on Indian carriers, a source with direct knowledge of the matter said.
The Tata Group airline is in the midst of a billionaire change after a period of government owned, and growth is already limited by delays in the delivery of Boeing and Airbus airplanes. He reported a net loss or $ 520 million in fiscal year 2023-2024, in sales or $ 4.6 billion.
Air India, which has a market share of 26.5 percent in India, flies to Europe, the United States and Canada, often crossing Pakistan airspace. It operates many more long distance routes than the largest domestic rival Indigo.
Cirium Asce data shows that Indigo, Air India and its Air India Express Budget Unit had approximately 1,200 combined New Delhi flights scheduled for Europe, Middle East and North America in April.
The Indian government is considering options to reduce the coup to the airline industry from the closure of Pakistan’s airspace, said another family of people with the matter.
One of the sources said that Indian carriers with the Ministry of Civil Aviation to work on possible solutions, including flying in difficult lands closer to China and some tax exemptions.
In his letter, Air India asked the Government to contact the Chinese authorities for certain authorizations on overtime, without elaborating.
He also asked the government to approve the transport of additional pilots in the United States and Canada to account for longer travel times.
Posted on May 1, 2025
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