Air India to Face $600 Mn Loss If Pak Airspace Ban Persists; Check What Tata Group Expects from Govt

Air India is projected to face a loss worth $600 million if the Pakistan airspace ban continues for a year. The Tata Group airline has sought the government’s support to ease economic costs faced by it due to the rerouting of flights and has suggested certain measures, including a tax exemption, subsidy model and the exploration of Chinese airspace, the Reuters reported.  

“Subsidy for affected international flights is a good, verifiable and fair option...the subsidy can be removed when the situation improves...The impact on Air India is maximum due to airspace closure, due to additional fuel burn...additional crew,” Reuters reported, citing a letter by Tata Group airline.

Also Read: India-Pakistan Airspace Ban: A Roadblock for Runways

Pakistan’s airspace ban is a second major blow to the Tata Group’s airline. The salt-to-power conglomerate is already facing a setback to make Air India a “world-class” airline due to delayed aircraft delivery by Boeing and Airbus. The Tata Sons chairman, N. Chandrasekaran had flagged these concerns earlier this year. 

“...You all need to help me by pushing Boeing and Airbus to deliver me the planes,” said Tata Sons chairman. 

Air India, along with several other Indian airlines, is eyeing to buy rejected Boeing aircraft by Chinese airlines to expand its fleet amid US-China trade tensions, Bloomberg reported.  

“We anticipate some of these aircraft, originally destined for Chinese carriers, will be redirected to Indian customers,” an airline industry specialist told TOI. 

Earlier in March this year, the Tata Group airline had benefitted from a similar development when Chinese airlines had rejected 41 Boeing 737 Max Jets because of issues, including safety concerns. 

Addressing the rejection of aircraft by Chinese carriers, Boeing CEO and President Kelly Ortberg said the aircraft will be redirected to other customers. 

“It’s an unfortunate situation, but we have many customers who want near-term deliveries, so we plan to redirect the supply to the stable demand,” Ortberg said in an earnings call in April. 

Chinese airline giants, including Air China, China Eastern Airlines and China Southern Airlines were set to receive 179 aircrafts altogether, between 2025 and 2027. In its effort to expand fleets, Air India is reportedly planning to book slots for future deliveries.