Indian Airlines Face $2bn Losses Over Pakistan Airspace Ban
India’s aviation industry has reportedly suffered losses of around $2 billion since the Pakistan airspace ban began in April 2025, forcing airlines to take longer routes and spend more on fuel and operations. Air India is now cutting back parts of its international network as those costs mount.
Air India is suspending flights between Delhi and Vienna from 31 October and between Delhi and Birmingham from 1 November, citing higher operating costs, rising jet fuel prices, and reduced aircraft availability due to maintenance and cabin upgrades. The airline said the combination of the Pakistani airspace closure, higher jet fuel prices, and limited availability of Boeing 787 aircraft had contributed to its decision to reduce international operations.
According to reports cited by Express News, Air India faces annual losses of $455 million to $591 million due to the airspace closure. The airline has informed the Indian government that the restrictions have affected its profit before tax. These figures are reported estimates, not audited airline accounts, and they should be read as such.
How the Pakistan airspace ban began
Pakistan closed its airspace to Indian aircraft on 23 April 2025, following the Pahalgam incident. The restriction has remained in place for around 18 months, forcing Indian airlines to use longer routes through Iran or Central Asia.
A Pakistan Airports Authority spokesperson said the restriction on Indian aircraft remained in effect through November, with a formal Notice to Airmen (NOTAM) issued to that effect. A NOTAM is the official notice that tells airlines and pilots about a change to airspace rules, and airlines plan their routes around it.
The ban applies to Indian aircraft, not to all flights in the region. Airlines from other countries continue to use Pakistani airspace under normal rules. That distinction is why the cost falls unevenly: Indian carriers bear the detour, while their competitors on the same city pairs do not.
Why a detour costs so much
The longer routes have reportedly increased fuel costs by up to 29 per cent and extended flight times by 30 minutes to three hours. Around 800 Indian flights per week are affected, including approximately 640 operating through Delhi.
Fuel is the largest single cost for an airline after staff and aircraft. A detour that adds an hour or more to a long-haul flight burns extra fuel twice over: once for the extra distance, and again because the aircraft must carry that extra fuel from departure, which makes it heavier for the whole journey.
Time also costs money in other ways. Longer flights need more crew hours, tighter turnaround planning, and more maintenance cycles. A route that was profitable at a given fare can turn loss-making when every flight on it costs nearly a third more in fuel alone.
Delhi bears the heaviest burden because it is India’s main long-haul hub. With around 640 of the 800 affected weekly flights operating through Delhi, the capital’s international network feels the closure more than any other Indian city.
The winter schedule cuts
Under its 2026-27 winter schedule, Air India is also reportedly considering suspending flights between Delhi and Copenhagen and reducing services to London Gatwick and San Francisco. Those moves, if confirmed, would show the pressure spreading beyond the two routes already suspended.
Vienna and Birmingham are not Air India’s largest routes, which makes their suspension telling. Airlines usually cut their weakest routes first when costs rise. If mid-sized European routes can no longer cover their costs, larger routes may face frequency cuts rather than outright suspension, as the reported Gatwick and San Francisco reductions suggest.
For passengers, the practical effect is fewer direct options and longer journeys. A traveller from Delhi to Europe who loses a direct flight must connect through another hub, adding hours to the trip. For the airline, the loss is twofold: it gives up revenue on the suspended route, and it hands connecting traffic to competitors.
What happens next
The restriction remains in effect through November, according to the Pakistan Airports Authority. No change to that position has been announced in the report. Until the airspace reopens to Indian aircraft, the extra fuel, time and crew costs will continue to accumulate week by week.
How much have Indian airlines reportedly lost due to the airspace ban?
Around $2 billion since Pakistan closed its airspace to Indian aircraft in April 2025, with Air India alone facing reported annual losses of $455 million to $591 million.
Which Air India routes are being suspended?
Delhi to Vienna from 31 October and Delhi to Birmingham from 1 November, with Delhi to Copenhagen also under consideration for suspension.
