Privatised Air India Seeks $600M Bailout After Pakistani Airspace Closure
- Air India wants a $600 million bailout to cover additional expenses its going to face from the sudden closure of Pakistani airspace, forcing it to make fuel stopovers in Vienna and Copenhagen.
Air India, which was privatized in 2022 by one of the country’s largest and wealthiest companies, is now reportedly asking the Indian government for a bailout after the sudden closure of Pakistani airspace late last month.
The Tata & Sons conglomerate estimates that the Pakistani airspace restrictions placed on Indian-registered planes could cost Air India almost $600 million if they last for 12 months which is due to longer flight times and increased fuel expenses.
In a letter to India’s Ministry of Civil Aviation, the airline has asked for subsidies to cover its additional expenses on affected international flights, arguing that a bailout of $591 million for each year of the restrictions would be a “good, verifiable and fair option.”
The letter continued: “The impact on Air India is maximum due to airspace closure, due to additional fuel burn, … additional crew.”
The worst-affected flights are Air India’s westbound ultra-long-haul flights to North America, which, until last week, were able to follow the “Great Circle route” through Russian airspace to reach the United States and Canada.
A prerequisite for following the Great Circle Route, however, is an initial northwards flight plan that goes straight through Pakistani airspace.
With Pakistan’s airspace now off-limits, Air India flights are having to follow a much more southerly routing through the Persian Gulf, Europe, and then over the Atlantic.
The new routing is so much longer that some flights are being forced to make short stopovers in Vienna and Copenhagen to refuel before continuing on to North America. Some flights in the opposite direction are also affected.
What is the Great Circle Route?
The Great Circle Route is a flight plan that accounts for the Earth’s natural curvature and represents the shortest possible distance between two points.
When flying internationally, especially between North America and Europe, you often see airplanes follow flight plans that take them very far north, which makes it look like the plane is flying a semi-circular route.
Tata & Sons is in the midst of a multi-billion dollar turnaround program at Air India, investing huge sums to buy new state-of-the-art aircraft and refurbish older aircraft that have seen better days.
Ultimately, Air India wants to go head-to-head with super connectors like Emirates by offering non-stop routes to Europe and North America on planes, which are, at the very least, just as good as their main rivals.
With many Western airlines barred from flying through Russian airspace since President Putin’s invasion of Ukraine and reciprocal sanctions, Air India has had a pretty big competitive advantage due to the Indian government’s stance on maintaining diplomatic relations with Moscow.
Some Western airlines have been forced to pull flights to India and the Far East due to the financial impact of Russian airspace restrictions and have not asked their respective governments for bailouts to continue operating these flights.
Do you think Air India should be getting a bailout? Have your say in the comments below.
