Indian airlines face longer international flights and higher fuel costs as they reroute their aircraft after Pakistan closed its airspace to them amid tension over a deadly terrorist attack in Kashmir.
Pakistan put the ban on Indian-owned and operated aircraft in place until May 23.
"If Pakistan’s airspace closure persists for one month, the cumulative financial impact on Indian airlines could be in the range of $10 million to $15 million," said Linus Bauer, founder and managing director of UAE-based consultancy BAA & Partners.
This includes direct operational costs such as fuel and crew overtime plus indirect revenue losses from flight cancellations, reduced cargo and schedule unreliability, he said.
Flying time for westbound flights may increase between 45 minutes to 90 minutes, depending on the route and aircraft type.
This could lead to "significant" fuel cost increases, higher crew duty hours, inefficiencies and operational complexity, he said.
As planes fly longer distances, the additional cost per flight could be $1,350 to $3,000 from increased fuel consumption alone, he added. Jet fuel makes up about 25 per cent of an airline's total cost, by far the single biggest component.
Relations between India and Pakistan have deteriorated rapidly over a deadly shooting in Kashmir. New Delhi accuses Islamabad of supporting “cross-border terrorism” after gunmen on Tuesday killed 26 people in the worst attack on civilians in India-administered Kashmir for a quarter of a century.
Islamabad denies involvement and calls attempts to link Pakistan to the attack at Pahalgam “frivolous”.
Higher ticket prices
Airlines will pass some of the additional costs on to consumers, leading to an increase of 30 per cent to 45 per cent in fares, analysts say.
Ticket prices could rise by 30 per cent to destinations in the Middle East and by 45 per cent to Europe due to higher fuel burn, said Mark Martin, chief executive of Martin Consulting, an aviation advisory and risk firm.
The renewed India-Pakistan tension comes ahead of the peak summer travel season that typically translates into bumper profits for airlines.
"It's extremely bad timing that we see such an escalation between India and Pakistan, with Pakistan closing its airspace to Indian-registered aircraft, right at the cusp of peak summer holiday season. Air India and Indigo will be the most affected by this," Mr Martin said.
"It's always the airline business that gets impacted when India and Pakistan spar and sabre-rattle ... this will have an earning impact on airlines' financials."
In 2019, the closure of Pakistan airspace for about five months caused a loss of at least $64 million to Air India, IndiGo and other airlines, Reuters reported, citing data from the Indian government.
International carriers to benefit
Foreign airlines, particularly Middle Eastern and European operators, could gain a competitive edge as their Indian peers grapple with flight detours, analysts say.
Gulf airlines such as Emirates, Etihad Airways and Qatar Airways could see a relative advantage to their Indian rivals since they can continue to fly over Pakistani airspace without restrictions, they said.
"Air India will be the most impacted as it has the most long-haul flights and especially non-stop services to the US, Europe and Canada," said Ameya Joshi, aviation analyst and founder of website NetworkThoughts.
"In 2019, the closure was for all flights to and from India. This time around it is restricted to Indian carriers, which will give an edge to foreign carriers."
Mr Bauer also said repeated disruption can erode confidence in direct India-Europe and India-Gulf services, potentially shifting market share towards Gulf hub airlines.
Routes between India–UAE (Dubai and Abu Dhabi), India–Saudi Arabia (Riyadh and Jeddah) and India–Qatar (Doha) will be most affected, he said.
Flights from Delhi, Mumbai and northern Indian cities in particular will require significant rerouting.
Mr Bauer estimates flight times from India to the Middle East could increase by 20 minutes to 40 minutes depending on the detour.
To offset fuel burn penalties, airlines may be forced to restrict cargo – particularly on narrow-body planes such as Airbus A320s and Boeing 737s, therefore reducing cargo revenue, he added.
IndiGo said about 50 international routes will be subject to "slight schedule adjustments" due to the Pakistani airspace closure.
Its flights to Almaty are cancelled from April 27 until May 7 at the earliest and to Tashkent from April 28 until May 7.
"With the same restrictions and limited rerouting options, unfortunately Almaty and Tashkent are outside the operational range of IndiGo’s current fleet," it said.
"We regret the inconvenience caused to our customers and assure them that we’re looking at all options to minimise disruptions," it said.
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5.30pm Maiden (PA) Dh70,000 (D) 1,400m
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9.25pm Al Maktoum Challenge Round-1 Group Two (TB) $350,000 (D) 1,600m
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