Indian aviation loses $2 billion due to closure of Pakistani airspace

The Indian aviation industry has reportedly suffered losses of approximately $2 billion due to the prolonged closure of Pakistan's airspace for Indian aircraft, which has been ongoing for 18 months since April 23, 2025, following the Pulwama incident. Air India alone is facing annual losses of $455 million to $591 million, significantly impacting its pre-tax profit. As a result of this financial strain, coupled with rising jet fuel prices and reduced availability of Boeing 787 aircraft, Air India has decided to suspend flights from Delhi to Vienna by the end of October and to Birmingham indefinitely from November. The airspace closure forces Indian airlines to take longer routes via Iran or Central Asia, increasing fuel costs by up to 29% and extending flight durations by 30 minutes to 3 hours, affecting around 800 weekly Indian flights, with 640 originating from Delhi. Pakistan's airspace closure for Indian flights is expected to continue until November, as per a NOTAM issued by the Pakistan Airports Authority. This situation is compelling Air India to scale back its European network in its winter schedule for 2026-27, potentially including suspensions to Copenhagen and reductions to London Gatwick and San Francisco.