The airline is seeking the Indian government for financial relief equivalent to its estimated loss.
Air India expects to face an additional cost of around $600 million if the ban from Pakistan’s airspace continues for a year and is asking the Indian government to compensate for the hit.
The New Delhi-based airline on Sunday called for a “subsidy model” proportional to the economic hit, and according to a letter sent by the airline to the Ministry of Civil Aviation, it is estimated that more than $591 million (Rs 5 billion) will continue each year, reported Reuters, a news agency.
Indian airlines are helping with higher fuel costs and longer travel times after Pakistan closed its aviation space to the country’s airlines following the attack on Kashmir tourists last week.
“Subsidies for affected international flights are an appropriate, verifiable and fair option. … We can remove the grants once the situation improves,” the letter states.
“The impact on Air India is the biggest because of the additional crew, as the airspace closures added fuel burn.
Air India declined to comment to Reuters. The Ministry of Civil Aviation did not respond to the outlet’s request for comment.
The Air India letter was sent after the government asked executives to assess the impact of the airspace ban on Indian airlines, a source who knows firsthand about the issue said.
The airline owned by the TATA Group is in the middle of a multi-billion-dollar turnaround after a period of government ownership, and growth is already limited due to delays in jet delivery from Boeing and Airbus. We reported a net loss of $520 million for 2023-2024, with sales of $4.6 billion.
With a market share of 26.5% in India, Air India flies to Europe, the US and Canada and often crosses Pakistan airspace. It operates routes far longer than its domestic rival Indigo.
Data from Cirium Ascend shows that Indigo, Air India and its budget unit Air India Express combine around 1,200 flights from New Delhi, scheduled for Europe, the Middle East and North America in April.
The Indian government is considering options to reduce the impact on the aviation industry from Pakistan’s airspace closure, saying three other people are familiar with the issue.
One source said Indian airlines will meet with the Ministry of Civil Aviation to tackle possible solutions, including flying through difficult and tax-free terrains near China.
In its letter, Air India asked the government to work with Chinese authorities on certain overflight clearances without giving details.