With Pakistan’s skies closed, Air India aims to cut costs and stabilize its finances
Air India is pushing the Indian government to persuade China to let it use a sensitive military airspace zone in Xinjiang to shorten routes as the financial toll of a ban on Indian carriers from flying over Pakistan mounts, according to a company filing.
The unusual request comes weeks after direct India-China flights resumed after a five-year hiatus following a standoff on the Himalayan border between the nations.
Air India is seeking to rebuild its reputation and international network after a London-bound Boeing 787 Dreamliner crashed in Gujarat in June, killing 260 people and forcing it to briefly ground flights for safety checks.
Reading: India inaugurates new military airbase near border with China
But that effort has been complicated by the closure of Pakistani airspace to Indian carriers since their diplomatic tensions flared in late April.
For Air India, the country’s only carrier with a large international network, fuel costs have risen by as much as 29 percent and travel times by up to three hours on some long-haul routes, according to the previously undisclosed document submitted to Indian officials in late October and reviewed by Reuters.
The Indian government is considering Air India’s appeal to diplomatically ask China to allow alternate routing and emergency access to airports in case of diversions at Hotan, Kashgar and Urumqi in Xinjiang, with the aim of reaching the US, Canada and Europe faster, the document said.
“Air India’s long-haul network is under severe operational and financial pressure… Securing the Hotan route will be a strategic choice,” he added.
The airline, owned by the Tata Group and Singapore Airlines, estimated the impact of the closure of Pakistan’s airspace on its pre-tax profits at $455 million a year – a significant figure given its 2024-25 fiscal loss of $439 million.
China’s foreign ministry said it was not aware of the situation and referred Reuters to “competent authorities”.
Air India and civil aviation authorities in India, China and Pakistan did not respond to queries from Reuters.
Without Hotan some routes become “unsustainable”
The Chinese airspace that Air India is seeking to acquire is surrounded by some of the world’s highest mountains of 20,000 feet (6,100 m) or more and is avoided by international airlines because of potential safety risks in the event of a decompression incident.
More crucially, it also falls under the People’s Liberation Army’s Western Theater Command, which is equipped with extensive missile, drone and anti-aircraft weapons and shares some airfields with civilian aircraft, military analysts say.
A Pentagon report on China’s military in December said the command’s responsibilities include responding to any conflict with India.
Read also: Saudi Arabia joins the “major non-NATO ally” club.
China’s military has much greater control over the country’s airspace than in most other aviation markets, restricting flight paths. Open source intelligence tracker Damien Symon said China’s military recently expanded an airbase in Hotan.
China’s defense ministry did not immediately respond to a request for comment.
Data from AirNav Radar shows that no non-Chinese airlines have departed or arrived at Hotan Airport in the past 12 months.
Shukor Yusof, founder of aviation consultancy Endau Analytics, said: “Air India can try, but it is doubtful that China will join” for access because of the region’s terrain, lack of emergency airports and the potential for security issues.
Airspace worldwide has become restricted due to proliferating conflict zones.
US carriers have been banned from flying over Russia since the war in Ukraine began in 2022 and have pulled out of many US-India routes. This gave Air India a near monopoly on direct flights from India.
But after the closure of Pakistan’s airspace, Air India’s Delhi-Washington route was suspended in August. Now, other routes are under review, with direct services from Mumbai and Bengaluru to San Francisco “becoming unviable” due to an extra three hours of travel time, including a technical stopover in Kolkata, the document said.
A flight from San Francisco to Mumbai on Lufthansa via Munich is now just five minutes longer than on Air India.
Reading: MI5 warns MPs about Chinese ‘bounty hunters’
“Passengers (are moving) to foreign carriers due to shorter flight time as they have the advantage of flying over Pakistan,” the document said.
Air India estimates that the requested Hotan China route could significantly reduce additional fuel requirements and flight times, help restore passenger and cargo capacity that has been reduced by up to 15% on routes such as New York- and Vancouver-Delhi, and reduce losses by $1.13 million per week.
The cash flow burden deepens the financial woes
With no sign of the airspace ban being eased, Air India also wants “temporary subsidy until Pakistan’s airspace is opened,” the document said.
Air India, which has $70 billion in aircraft orders, is seeking help to resolve legacy tax issues.
Read also: Trump approval falls to lowest level of his term
India’s government has compensated the airline for claims payable before selling it to Tata in 2022, but several notices have been received about old tax liabilities of $725 million, raising legal and reputational risks, the document said.
A confidential government announcement from March, seen by Reuters, showed that tax authorities warned of “coercive measures” – which may include freezing assets – to recover debts of $58 million in one case.
Challenging such tax claims has led to “an additional cash flow burden … despite assurances on divestment,” the airline said.
a href=”https://tribune.com.pk/story/2578176/air-india-presses-china-for-xinjiang-overflight-to-ease-mounting-liquidity-strain”>Source link
