Air India may pay up to $600 million in extra costs after Pakistan shuts its airspace to Indian airlines, news agency Reuters said Thursday evening citing a company letter it had accessed.
The letter said the costs – which could add up over the next year, assuming Pak airspace remains shut to it – includes increased fuel costs for longer flight times by re-routed planes.
The longer flight times, the airline warned, will also impact passengers.
As a result, Air India expects a loss of over $591 million for each year the ban lasts.
The ban – ordered in response to diplomatic restrictions by India after the Pahalgam attack, which Delhi has said was supported by the Pak deep state – is expected to stay till May 23.
It does not, however, affect international airlines.
Air India has, therefore, asked the government for proportionate subsidies, Reuters said, quoting the letter to the Aviation Ministry. “Subsidy for affected international flights is a good, verifiable and fair option … the subsidy can be removed when the situation improves…”
“Impact on AI is maximum due to airspace closure, additional fuel burn, crew.”
READ | Airlines Brace For Higher Costs, Detours After Ban From Pakistan Airspace
Neither Air India nor the Aviation Ministry has commented so far.
Pak Airspace Ban, Longer Flights
It isn’t just Air India that is bracing for increased costs, something that will hurt the Tata Group-owned airline that reported a net loss of $520 million in FY2023/24 alone.
IndiGo has said some of its flights have also been impacted; for example, its New Delhi-Baku (in Azerbaijan) flight on Thursday took five hours and 43 minutes, 38 minutes longer than usual.
READ | Pak Closes Airspace, San Francisco-Delhi Flight Time Up By 4 Hours
The impact, though, is likely to be greater on Air India since it operates the greater number of international flights that normally fly over Pakistan to reach its destination. Delhi-Middle East flights, for example, will now be forced to fly at least an hour extra, requiring more fuel.
READ | Air India, IndiGo Warn Of Impact On Flights After Pak Shuts Airspace
Between AI and its budget service, Air India Express, and IndiGo, an estimated 1,200 flights left from New Delhi to destinations in Europe, the Middle East, and North America in April.
Subsidies For Airlines?
Prime Minister Narendra Modi’s government has vowed vengeance for Pahalgam, warning the terrorists who pulled the trigger and those who planned the attack of retribution.
READ | PM’s Free Hand To Forces To Decide Military Response To Pahalgam
On Wednesday the PM met Defence Minister Rajnath Singh and the Chief of Defence Staff General Anil Chauhan, and reportedly greenlit military action against The Resistance Front, a proxy of a banned Pakistan-based terrorist group, the Lashkar-e-Taiba.
The government, though, is understood to be aware of the impact of the attack and the consequent political and military fallout, on businesses in Kashmir and the country.
Reuters reported it is considering options to offset the impact on airlines, assistance that could include allowing extra pilots on longer flights to the US and Canada, tax breaks and, in an unusual move, working with China (a Pak ally) for overflight clearances.
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