Air India to receive $600 million in attacks from Pakistan’s airline ban in 12 months seeking government compensation: Report
Air India expects that if the ban on Pakistan’s airspace lasts for one year, it will face an additional cost of about $600 million and demands compensation from the federal government.
According to the news agency, Air India asked the Indian government to adopt a “subsidy model” commensurate with the economic hit, and estimated that the ban would last more than 50 billion rupees ($591 million) per year.
Fuel costs and longer journey times and longer journey times for Air India after Pakistan’s attack on tourists in Kashmir last week.
“Subsidies for affected international flights are a good, verifiable and fair option … when the situation improves, subsidies can be cancelled.”
“Due to airspace closure, due to additional fuel combustion…extra crew, the biggest impact on Air India.”
A source who knows directly about the matter said the letter from India was being sent after the government asked its executives to assess the impact of the airspace ban on Indian airlines.
The Tata Group-owned airlines are in a multi-billion dollar turnaround after a period of government ownership, and growth has been restricted by jet delivery delays from Boeing and Airbus. It reported a net loss of $520 million for fiscal 2023-2024 and sales of $4.6 billion.
Air India has a 26.5% market share in India, flying to Europe, the United States and Canada, often crossing Pakistani airspace. It runs more long-distance routes than its larger domestic rival Indigo.
Indigo, India Air India Express has about 1,200 flights in New Delhi, which is scheduled to be used in Europe, the Middle East and North America in April, according to Cirium Ascend.
Three other familiar with the matter said the Indian government is considering the option to reduce the blow to the aviation industry from the closure of Pakistan’s airspace.
One of the sources said that Air India met with the Ministry of Civil Aviation to address possible solutions, including flying on difficult terrain close to China and some tax exemptions.
In the letter, Air India asked the government to maintain certain flights with Chinese authorities without elaborating on them.
It also requires the government to approve the carrying of additional pilots on flights in the U.S. and Canada to take up longer travel time.
