MUMBAI: Air India is expecting to face around USD 600 million in additional costs if a ban from Pakistan's airspace lasts for a year. The Tata Group run has written to the Indian government, seeking compensation for the hit.
According to Reuters, Air India on April 27 wrote a letter to the Civil Aviation Ministry in which it asked the Indian government for a subsidy model proportionate to the economic hit and estimated a loss of more than USD 5,000 crore (USD 591 million) for each year the ban lasts.
"Subsidy for affected international flights is a good, verifiable and fair option which 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, and additional crew.” Queries regarding the letter sent by TNIE to Air India remained unanswered till the time of print.
Indian airlines will be hit by higher fuel costs, longer journey times and a rise in few other operational expenses after Pakistan shut its airspace to the country's carriers amid growing tension with India following a deadly attack on tourists in Kashmir last week.
According to industry experts, Pakistan’s action will affect Indian carriers’ flights, primarily taken from northern cities to destinations such as Central Asia, West Asia, Europe, the United Kingdom and North America.
Air India along with Air India Express and IndiGo together had approximately 1,200 flights scheduled from New Delhi to Europe, North America, and the Middle East in April. The rerouting of these flights increases flight durations by up to 1.5 hours.
According to PTI, Indian carriers are incurring an additional Rs 77 crore in weekly costs due to rerouting international flights. The monthly operational impact could exceed Rs 306 crore.
Air India's letter was reportedly sent after the Centre asked its executives to assess the impact of Pakistan's airspace ban on Indian carriers. The full-service carrier flies to West Asia, Europe, the United States and Canada, often crossing Pakistan's airspace.
As per the report, the Indian government is considering options to reduce the financial impact of Pakistan's airspace ban on domestic airlines. As per sources, the Civil Aviation Ministry’s possible solutions may include flying over terrain closer to China and some tax exemptions.