Air India has asked the Indian government to make up for the cost of the year-long ban on Pakistan’s airspace by paying about $600 million in additional costs.
According to a letter the airline sent to the Ministry of Civil Aviation and obtained by Reuters, the New Delhi-based airline requested a “subsidy model” in proportion to the economic impact, which it estimated would lose more than $591 million (50 billion Indian rupees) annually for the duration of the ban.
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, Indian airlines are anticipating higher fuel costs and longer travel times.
“Subsidy for affected international flights is a good, reliable, and fair choice. According to the report, the letter stated that the subsidy can be eliminated as the situation improves.
“Air India’s impact is greatest as a result of airspace closure, additional fuel consumption, and additional crew,” according to the statement.
Reuters received a request from Air India to comment. The outlet requested comment, but the Civil Aviation Ministry did not.
According to a source with direct knowledge of the situation, Air India sent the letter after the government asked its executives to assess the impact of the airspace ban on Indian carriers.
After a period of government ownership, the Tata Group-owned airline is currently in the process of undergoing a multibillion-dollar turnaround, and Boeing and Airbus’ jet delivery delays are already limiting growth. It reported a net loss of $520m in fiscal 2023-2024, on sales of $4.6bn.
Air India frequently flys through Pakistan’s airspace, which has a 26.5 percent market share in India. It has a lot more long-haul routes than its domestic rival IndiGo.
According to information from Cirium Ascend, IndiGo, Air India, and Air India Express, the company’s budget division, have roughly 1,200 flights scheduled for Europe, the Middle East, and North America in April.
Three other people with knowledge of the situation said that the Indian government is considering ways to lessen the impact the closure of Pakistan’s airspace would have had.
Indian carriers met with the Civil Aviation Ministry to discuss possible solutions, including tax exemptions for flying over challenging terrain closer to China.
Source: Aljazeera
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