Tata-owned air carrier Air India will incur additional costs to the tune of ₹5,004 crore ($600 million) if the airspace ban in Pakistan is in effect for a year, and has asked the government to compensate for it, according to news agency Reuters, citing a company letter.

The letter dated April 27, to the Ministry of Civil Aviation, has demanded a “subsidy model” to compensate for each year the ban on Pakistani airspace lasts. “Subsidy for affected international flights is a good, verifiable and fair option...the subsidy can be removed when the situation improves," the letter said, adding that the impact on Air India, “is maximum due to airspace closure, due to additional fuel burn...additional crew,” as quoted in the report.

Air India, which operates the highest number of medium- and long-haul flights to the west, runs as many as 71 weekly flights to North America and 133 to 10 destinations across Europe. IndiGo, India’s largest carrier, is also expected to be impacted as it prepares to launch direct flights to Europe starting July this year.

Earlier, media reports suggested that international flights from Delhi and other northern Indian cities, particularly Amritsar, Jaipur, Lucknow, and Varanasi, are expected to face delays and higher fares, with flights to Europe and North America—including the U.S. and Canada—could be extended by up to two to three hours due to rerouting.

The reciprocal airspace bans between India and Pakistan are inflicting substantial financial burdens on airlines from both nations, with Indian carriers bearing the brunt due to their extensive international operations. Multiple reports have estimated that collectively, Indian airlines are incurring additional operational costs of about ₹77 crore per week, translating to over ₹307 crore monthly. The airspace closure has led to the diversion of over 600 international flights since April 24, with some flights requiring unscheduled refuelling stops in cities like Copenhagen and Abu Dhabi.

Pakistan is experiencing significant revenue losses due to the cessation of overflight fees from Indian carriers. Multiple estimates suggest a daily loss of around $120,000, considering fees ranging from $580 for narrow-body aircraft to $1,700 for wide-body jets.

Additionally, Pakistan International Airlines, the flag carrier of Pakistan, is facing increased operational costs due to longer flight routes necessitated by the airspace restrictions. Flights from Islamabad to Kuala Lumpur now take close to eight-and-a-half hours, up from the usual five-and-half hours, leading to higher fuel consumption and crew expenses.​