Air India demands ₹4000 Cr compensation from GOI due to closure of Pakistani airspace. Proposed opening China sector?

Air India recently reported that it has suffered losses amounting to ₹4,000 crore due to the closure of Pakistani airspace for Indian carriers following Operation Sindoor and the Pahalgam terror attack. This airspace closure was implemented by both India and Pakistan in April 2025, resulting in mutual bans on each other’s aircraft from transiting their airspace, which severely impacted key international routes, especially those connecting India to Europe and North America.

The closure forced Air India to significantly reroute flights, leading to longer travel times—by an average of 60 to 90 minutes per flight—and higher operational costs, especially for fuel and crew. The airline had to bear additional expenses with every extended detour, escalating the financial strain as fuel costs and staff hours rose sharply across hundreds of affected flights. Consequently, Air India submitted a demand to the Government of India for compensation of ₹4,000 crore, arguing that these losses directly resulted from strategic airspace restrictions and were beyond the airline’s control.

This demand reflects not only the operational challenges but also the broader economic impact of geopolitical decisions on national carriers during periods of heightened tension.