Skip to content 
Search

Latest Stories

Air India faces loss from Pakistan airspace ban, seeks support

Pakistan airspace ban hits Indian carriers with longer routes

Air India faces loss from Pakistan airspace ban, seeks support

FILE PHOTO: Air India aircrafts are seen parked at the Chhatrapati Shivaji Maharaj International Airport (CSMIA) in Mumbai. (Photo by INDRANIL MUKHERJEE/AFP via Getty Images)

AIR INDIA expects to face around $600 million (£480m) in additional costs if a ban from Pakistan's airspace lasts for a year, and has asked the federal government to compensate it for the hit, a company letter seen by Reuters shows.

Indian airlines are bracing for higher fuel costs and longer journey times after Pakistan shut its airspace to the country's carriers in a tit-for-tat retaliation following an attack on tourists in Kashmir last week.


Air India on April 27 asked the Indian government for a "subsidy model" proportionate to the economic hit, estimating a loss of more than $591m (£473m) for each year the ban lasts, according to a letter sent by the airline to the Civil Aviation ministry.

"Subsidy for affected international flights is a good, verifiable and fair option ... the subsidy can be removed when the situation improves," the letter said.

"The impact on Air India is maximum due to airspace closure, due to additional fuel burn...additional crew."

Air India declined to comment. India's Civil Aviation ministry did not immediately respond to a request for comment.

Air India's letter was sent after the government asked its executives to assess the impact of the airspace ban on Indian carriers, said a source with direct knowledge of the matter.

The Tata Group-owned airline is in the midst of a multi-billion dollar turnaround after a period of government ownership, and growth is already constrained by jet delivery delays from Boeing and Airbus. It reported a net loss of £416m in fiscal 2023-2024, on sales of $4.6 billion (£3.68bn).

Air India, which has a 26.5 per cent market share in India, flies to Europe, the US and Canada, often crossing Pakistan's airspace. It operates many more long-haul routes than bigger domestic rival IndiGo.

Data from Cirium Ascend shows IndiGo, Air India and its budget unit Air India Express had roughly 1,200 flights combined from New Delhi scheduled for Europe, the Middle East and North America in April.

The Indian government is considering options to reduce the hit to the airline industry from the closure of Pakistan's airspace, three other people familiar with the matter said.

One of the sources said Indian carriers met with the Civil Aviation ministry to work on possible solutions, including flying over difficult terrain closer to China, and some tax exemptions.

In its letter, Air India asked the government to liaise with Chinese authorities for certain overflight clearances, without elaborating.

It also asked the government to approve the carrying of extra pilots on flights on the United States and Canada to account for longer travel times.

(Reuters)

More For You

Bangladesh seeks US deal to shield garment industry from tariffs

Workers are engaged at their sewing stations in a garment factory in Savar, on the outskirts of Dhaka, on April 9, 2025. (Photo by MUNIR UZ ZAMAN/AFP via Getty Images)

Bangladesh seeks US deal to shield garment industry from tariffs

BANGLADESH, the world's second-biggest garment manufacturer, aims to strike a trade deal with the US before Donald Trump's punishing tariffs kick in next week, said the country's top commerce official.

Dhaka is proposing to buy Boeing planes and boost imports of US wheat, cotton and oil in a bid to reduce the trade deficit, which Trump used as the reason for imposing painful levies in his "Liberation Day" announcement.

Keep ReadingShow less
UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Bond yields ease following Starmer’s support for Reeves

THE COST of UK government borrowing fell on Thursday, partially reversing the rise seen after Chancellor Rachel Reeves became emotional during Prime Minister’s Questions.

The yield on 10-year government bonds dropped to 4.55 per cent, down from 4.61 per cent the previous day. The pound also recovered slightly to $1.3668 (around £1.00), though it did not regain all its earlier losses.

Keep ReadingShow less
modi-trump-getty
Modi shakes hands with Trump before a meeting at Hyderabad House in New Delhi on February 25, 2020. (Photo: Getty Images)
Getty Images

Indian exporters watch closely as Trump says trade deal with India likely

THE US could reach a trade deal with India that would help American companies compete more easily in the Indian market and reduce tariff rates, President Donald Trump said on Tuesday. However, he cast doubt on a similar deal with Japan.

Speaking to reporters on Air Force One, Trump said he believed India was ready to lower trade barriers, potentially paving the way for an agreement that would avoid the 26 per cent tariff rate he had announced on April 2 and paused until July 9.

Keep ReadingShow less
Kolhapuri sandal sales surge in India post Prada controversy

Customers shop for 'Kolhapuri' sandals, an Indian ethnic footwear, at a store in New Delhi, India, June 27, 2025. REUTERS/Adnan Abidi

Kolhapuri sandal sales surge in India post Prada controversy

INDIAN footwear sellers and artisans are tapping into nationalist pride stoked by the Prada 'sandal scandal' in a bid to boost sales of ethnic slippers with history dating back to the 12th century, raising hopes of reviving a struggling craft.

Sales are surging over the past week for the 'Kolhapuri' sandals that have garnered global attention after Prada sparked a controversy by showcasing similar designs in Milan, without initially crediting the footwear's origins.

Keep ReadingShow less
UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Economy grew 0.7 per cent in Q1 2025, fastest in a year

THE UK economy expanded at its fastest pace in a year during the first quarter of 2025, driven by a rise in home purchases ahead of a tax deadline and higher manufacturing output before the introduction of new US import tariffs.

Gross domestic product rose by 0.7 per cent in the January-to-March period, the Office for National Statistics (ONS) said, confirming its earlier estimate. This was the strongest quarterly growth since the first quarter of 2024.

Keep ReadingShow less