Air India’s profitability hit as Pakistani airspace ban extends, adds flying hours

WEB DESK: The continuing ban for Indian airlines in using Pakistani airspace is adding flying hours for non-stop flights and will weigh down Air India Limited’s path to profitability, its top executive said in an interview.

“The impact is significant but we have been able to sustain non-stop operations” to most destinations in North America and Europe, Air India Chief Executive Officer Campbell Wilson said. “It’ll certainly hit our bottomline.”

The airspace curbs have increased flying time for west-bound flights from India by an hour or so, according to Wilson, who declined to give details on the discussions the Tata Group-owned carrier was having with stakeholders on this front.

The armed conflict between India and Pakistan that erupted May 7 was the worst between the nuclear-armed neighbours in decades, with both sides trading drone and missile-strikes besides artillery and small arms fire along their shared border. It was triggered by a gruesome attack on civilians in Indian-controlled Kashmir on April 22. While a ceasefire was announced on May 10, Pakistan has extended the airspace ban for Indian airlines until June 24.

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Geopolitical strife has been complicating flying routes and business models for airlines globally in the past few years as they skirt conflict zones. Tariffs are also now a closely watched development for the sector.

“We want certainty. Uncertainty is difficult when you are making investment decisions,” Wilson said, in an interview to Bloomberg, adding that this was a common theme at the ongoing aviation industry event in New Delhi. So far, Air India sees no impact of tariffs on travel flows for its geography and markets.

The recent showdown between the US President and Harvard University had added another layer of complication for international flyers especially those looking to study in American institutions.

Pointing to anecdotal stories, Wilson said that there seems to be some shift in the larger student population from India that usually vies to be on US campuses.

“You hear people think of alternatives,” he said. “Obviously, it’s a relatively new development, so people are still digesting it but it does seem that people are more willing to look at alternative locations than perhaps they were before.”

Wilson, who steered the massive merger of Tata-owned carriers Air India and Vistara last year, declined to comment on media stories on the airline’s discussions with plane makers to buy more narrow body jets.

Air India, the unprofitable carrier which the Tata conglomerate acquired from the Indian government in 2021, will start receiving new planes it had ordered towards the end of this year, said Wilson.

The deliveries are “later than we hoped, slower than we hoped,” he said. “It is concerning our ambitions a little bit in the short term but the long term opportunity for this market is massive, so we are very, very confident.”