Air India is facing a significant financial challenge due to a ban from Pakistan’s airspace. The airline estimates that if the ban continues for a year, it could incur an additional $600 million in costs. In light of this, Air India has approached the Indian government for financial support, suggesting a subsidy model to help offset the losses.
In a letter to the Ministry of Civil Aviation, Air India outlined that it could lose over $591 million, or about 50 billion Indian rupees, for each year that the airspace remains closed. The ban is a result of rising tensions following an attack on tourists in Kashmir, prompting Pakistan to restrict Indian flights. This situation has forced Indian airlines to consider longer flight routes, which leads to higher fuel costs and additional crew expenses.
Air India emphasized that the impact of the airspace closure is particularly severe for them, given their extensive international operations. The airline currently holds a 26.5 percent market share in India and operates numerous long-haul flights to destinations in Europe, the United States, and Canada, often flying over Pakistan.
The Indian government is aware of the situation and is exploring ways to alleviate the financial strain on the airline industry. Reports suggest that Indian carriers have met with officials to discuss potential solutions, which may include flying over challenging terrain near China and offering tax exemptions.
Air India’s request for government assistance comes as it is already in the midst of a major turnaround strategy after years of financial difficulties. The airline reported a net loss of $520 million in the last fiscal year, despite generating sales of $4.6 billion. This financial strain is compounded by delays in receiving new aircraft from Boeing and Airbus.
As the situation develops, Air India is urging the government to engage with Chinese authorities to secure overflight clearances that could ease the burden of the airspace ban. The outcome of these discussions could be crucial for Air India and other Indian carriers affected by the ongoing restrictions.