SOURCE: AFI
In a significant escalation of economic fallout from the ongoing India-Pakistan tensions, major global airlines, including Lufthansa, Air France, British Airways, Swiss International Air Lines, Emirates, ITA Airways, and LOT Polish Airlines, have voluntarily ceased using Pakistani airspace, opting for longer routes to avoid the region. This development, spurred by heightened geopolitical risks following the April 22, 2025, terror attack in Pahalgam, Jammu and Kashmir, is dealing a severe blow to Pakistan’s economy, already strained by a precarious financial situation. The move, described by some as Pakistan’s “reckless airspace games,” is costing the country millions in lost overflight fees while amplifying regional instability.
The decision by these carriers comes in the wake of Pakistan’s closure of its airspace to Indian airlines on April 24, 2025, a retaliatory measure following India’s accusation of Pakistani involvement in the Pahalgam attack, which claimed 26 lives. India reciprocated by barring Pakistani carriers from its airspace until May 23, 2025, further intensifying the diplomatic standoff. While Pakistan initially allowed international airlines to continue using its airspace, the voluntary avoidance by major European and Middle Eastern carriers has compounded the economic damage, as these airlines reroute flights over the Arabian Sea, Iran, or Central Asia to reach destinations like Delhi, Bangkok, and Ho Chi Minh.
Pakistan’s Civil Aviation Authority (CAA) relies heavily on overflight fees, which are charged based on aircraft type, weight, and distance traveled. For a Boeing 737, the fee is approximately $580, with higher charges for larger aircraft like the Airbus A380 or Boeing 747. Historically, Pakistan earned substantial revenue from these fees, particularly from the high volume of flights connecting Europe and Asia via its airspace. However, the current avoidance by major carriers is slashing this income significantly. In 2019, a similar airspace closure following India’s Balakot airstrike cost Pakistan nearly $100 million over five months, with daily losses estimated at $760,000, including $232,000 from overflight fees alone and $460,000 in operational losses for Pakistan International Airlines (PIA).
Posts on X suggest that the current restrictions could lead to even greater losses, potentially reaching $300-400 million annually, given the broader avoidance by non-Indian carriers and the growth of India’s aviation market, the third largest globally. Pakistan’s economy, already grappling with a 70% debt-to-GDP ratio, 38.5% inflation in 2023, and dwindling foreign reserves, can ill afford this hit. The loss of overflight revenue, combined with PIA’s rerouting costs via China for destinations like Kuala Lumpur, exacerbates the financial strain on a nation that narrowly avoided sovereign default in 2023 with a $3 billion IMF bailout.
The rerouting of flights is causing operational disruptions for airlines and passengers alike. Lufthansa’s Frankfurt-to-Delhi flight (LH760), for instance, took nearly an hour longer on May 4, 2025, due to a detour via Saudi Arabia and the Persian Gulf, increasing fuel costs and potentially leading to higher ticket prices. Air France has altered schedules for routes to Delhi, Bangkok, and Ho Chi Minh, while Swiss, part of the Lufthansa Group, is offering free rebooking for passengers missing connections due to extended flight times. These changes highlight the broader impact of Pakistan’s airspace restrictions on global aviation, with airlines prioritizing safety amid perceived risks along the India-Pakistan border.
Indian airlines, including Air India and IndiGo, are also bearing the brunt of the airspace closure, with Air India estimating annual losses of $600 million due to increased fuel costs and longer routes to Europe, North America, and the Middle East. However, the economic damage to Pakistan appears more immediate, as the loss of overflight fees from both Indian and non-Indian carriers compounds the impact of India’s reciprocal measures, such as banning Pakistani ships from Indian ports and suspending all imports.
Pakistan’s decision to close its airspace, followed by the voluntary avoidance by major airlines, is not just an economic misstep but a move that heightens regional tensions. The Pahalgam attack has reignited longstanding conflicts, with India suspending the Indus Waters Treaty and bolstering military readiness along the border. Pakistan’s military conducted a missile test of its 450-km-range Abdali Weapon System, signaling its preparedness for any “misadventure.” The airspace restrictions, coupled with trade suspensions and diplomatic expulsions, have pushed India-Pakistan relations to their lowest point in years, raising fears of further escalation between the nuclear-armed neighbors.
Analysts warn that Pakistan’s strategy may backfire, as the economic losses and isolation could destabilize the country further, while the avoidance of its airspace by global carriers underscores the geopolitical risks of its actions. “Pakistan is shooting itself in the foot,” remarked X user Naren Menon, echoing sentiments that the country’s closure of airspace to Indian flights, now compounded by the loss of international carriers, represents a costly miscalculation.
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