Pahalgam terror attack: One decision by Pakistan and this Indian firm is set to lose Rs 50000000000 due to….

Owing to escalating tension between India and Pakistan, Islamabad has decided close airspace for Indian carriers. Due to this, Air India is suffering huge losses. It now has to take longer routes to Europe, North America and some other countries. This will cost the company an additional $600 million and for which the airline has asked the government to compensate for this loss.

According to reports, Air India has demanded compensation from the government in this regard. It is noteworthy that Pakistan has taken this step after the terrorist attack on tourists in Pahalgam, Kashmir which claimed lives of 26 people including a Nepali citizen. Due to this, Indian aviation companies will have to take a longer route.

Demand for subsidy model

Air India has sought a ‘subsidy model’ from the government. This model will help in minimising the financial losses. According to Reuters, Air India has told the government that if Pakistan’s airspace remains closed, they will lose more than Rs 50 billion ($591 million) every year. The letter reads, “Subsidy for the affected international flights is a good, verifiable and reasonable option… The subsidy can be removed when the situation improves.”

Air India is most affected

The letter further states, “Air India has been the most affected due to the closure of airspace, as longer routes are resulting in more fuel being burned… additional crew is required.” That is, more expenditure is also being incurred on the staff operating the aircraft.

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