Air India, taken over by Tata Group in 2022, merged with Vistara—its joint venture with Singapore Airlines—last year. PHOTO: REUTERS
NEW DELHI/HONG KONG:
The closure of Pakistan’s airspace to Indian carriers has intensified Air India’s operational and financial woes, prompting the airline to lobby the Indian government to seek access to sensitive military airspace over China’s Xinjiang region, according to a company document reviewed by Reuters.
The ban, in effect since late April amid diplomatic tensions, has forced longer detours on long-haul routes, increasing fuel costs by up to 29% and adding as much as three hours to journey times. Routes from Mumbai and Bengaluru to San Francisco are now considered “unviable,” with passengers shifting to foreign carriers that benefit from Pakistan overflight.
Air India estimates the ban has cut its annual profit before tax by $455 million, surpassing its fiscal 2024-25 loss of $439 million. To offset the impact, the airline has requested alternate routing over Hotan, Kashgar, and Urumqi in Xinjiang, which could reduce fuel use, restore up to 15% of lost passenger and cargo capacity, and trim weekly losses by an estimated $1.13 million.
The airline also sought temporary subsidies from the government until Pakistan reopens its airspace. Compounding the challenge, legacy tax liabilities worth $725 million, including coercive recovery notices of $58 million, have added cash flow pressure despite prior government indemnities during its 2022 sale to the Tata Group.
Safety and security concerns make China’s airspace difficult to access. The proposed route lies over peaks exceeding 20,000 ft and within the People’s Liberation Army Western Theatre Command, which has extensive missile, drone, and air-defence infrastructure. No non-Chinese airlines have operated at Hotan in the past year, and aviation analysts warn access is unlikely due to terrain and security risks.
The request comes just weeks after direct India-China flights resumed following a five-year hiatus after a Himalayan border clash. Air India has been rebuilding its international network and reputation following the June crash of a Boeing 787 Dreamliner in Gujarat, which killed 260 people and prompted temporary flight suspensions for safety checks.
