Air India (AI) is facing an estimated ₹4,000 crore hit as a result of the ongoing closure of Pakistan’s airspace to Indian carriers, CEO Campbell Wilson has disclosed.
The restriction, which has forced long-haul flights to reroute and incur elevated fuel and crew costs, is among a series of unprecedented shocks the airline is navigating in a challenging year.
Speaking at the Aviation India & South Asia 2025 conference in New Delhi on Wednesday, Wilson described the ₹4,000 crore impact as “a big sum in anyone’s book,” remarking that the development “literally came out of the blue.”
He noted that the airline had earlier quoted a higher figure of roughly ₹5,000 crore to the aviation ministry in May, but this was based on preliminary estimates.
Since then, mitigation efforts such as route adjustments have helped curb some of the losses.
The disruption stems from Pakistan closing its airspace to Indian airlines beginning in June 2025, following escalating military tensions between the two countries.
The restriction has forced Air India to reroute flights to Europe and North America through longer trajectories, leading to increased fuel consumption, extended flight times, and higher crew expenses.
Long-haul international routes account for a substantial portion of Air India’s operations — around 60 percent of its flights — making the impact particularly acute.
Wilson said that in addition to the airspace closure the airline has been dealing with a series of external headwinds, which he characterised as “almost Black Swan events.”
These include the catastrophic crash of a Boeing 787 aircraft in June from Ahmedabad, supply-chain pressures delaying aircraft deliveries, and other geopolitical shocks such as Middle East airspace closures and export constraints.
While Air India’s parent, Tata Sons Ltd., reported revenue growth of 15 percent to ₹78,636 crore for the year ended March 31 2025, losses widened to ₹10,859 crore as operational pressures mounted.
The airline’s five-year transformation plan, Vihaan.AI, is now facing sharper turbulence amid these external shocks.
In his remarks, Wilson acknowledged that the airline’s competitive environment is being reshaped by factors outside its core control.
He emphasized the need for realistic planning around bilateral flying rights and warned that overly liberalised access could undermine Indian carriers’ investments in wide-body aircraft and network expansion — a strategic priority for Air India.
Despite the sizable setback, Wilson expressed resolve to stay the course on Air India’s recovery and modernization agenda, stating that the airline remains committed to safety, customer experience and operational resilience.
However, he added that 2025 would be remembered as “a challenging year,” where global instability and geopolitical disruptions weighed on growth.
The estimated ₹4,000 crore loss highlights the vulnerability of aviation business models to external geopolitical events, especially for carriers heavily exposed to international long-haul markets.
As Air India grapples with diverted routes, cost escalation and disrupted margins, the airline’s future profitability and transformation path will remain under close investor and regulator scrutiny.
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