In a dramatic escalation of tensions following the Pahalgam terror attack in April 2025, Pakistan made the bold move to close its airspace to Indian airlines. This decision, a retaliatory measure against India’s diplomatic and economic actions, was intended to disrupt India’s aviation sector. However, as history and economics suggest, this move is likely to backfire, costing Pakistan millions of dollars in lost revenue while Indian airlines adapt to the challenge. Let’s dive into how Pakistan’s airspace closure could lead to significant financial losses and why this decision might hurt Islamabad more than New Delhi.
### The Backdrop: A Tit-for-Tat Escalation
The closure of Pakistan’s airspace to Indian carriers came in the wake of a deadly terror attack in Pahalgam, Jammu and Kashmir, where 26 tourists were killed. India attributed the attack to Pakistani militants, prompting a series of punitive measures, including suspending the Indus Waters Treaty, downgrading diplomatic ties, and closing the Wagah border crossing. Pakistan, in response, retaliated by shutting its airspace to Indian-owned and operated airlines, suspending trade, and halting special South Asian visas for Indian nationals.[](https://www.reuters.com/world/india/india-calls-all-party-meet-summons-top-pakistani-diplomat-after-kashmir-attack-2025-04-24/)
While Pakistan’s intent was to pressure India’s aviation industry, the economic ramifications of this decision are likely to hit Pakistan’s own coffers hardest. This isn’t the first time Pakistan has taken such a step— a similar closure in 2019 after the Pulwama attack provides a clear precedent for the financial fallout.
### The Economics of Airspace: Overflight Fees Explained
Countries earn significant revenue from **overflight fees**, charges imposed on airlines for using their airspace. These fees are calculated based on factors like the type of aircraft, its weight, and the distance flown over a country’s territory. For Pakistan, which sits on a key aviation corridor for flights from India to Europe, North America, and the Middle East, these fees are a substantial source of income.
For instance, a Boeing 737 flying through Pakistani airspace incurs approximately **$580** in overflight fees, with larger aircraft like the Boeing 777 or Airbus A380 facing charges as high as **$1,200 to $1,700** per flight. With India being the world’s third-largest and fastest-growing aviation market, hundreds of Indian flights—operated by carriers like Air India, IndiGo, and Vistara—traverse Pakistani airspace daily. By barring these flights, Pakistan is effectively forfeiting millions in revenue.[](https://www.financialexpress.com/world-news/airspace-wars-india-to-get-away-with-minor-adjustments-but-pak-airlines-are-losing-millions/3825276/)
### Lessons from 2019: A $100 Million Loss
Pakistan’s airspace closure in 2019, following the Pulwama terror attack and India’s Balakot airstrikes, offers a stark lesson. That closure, which lasted about five months, cost Pakistan nearly **$100 million** in lost revenue. Approximately 400 flights were affected daily, leading to a daily loss of around **$232,000** from overflight fees alone. When combined with additional losses from terminal navigation, landing, and parking charges, the total daily hit to Pakistan’s Civil Aviation Authority (CAA) and Pakistan International Airlines (PIA) reached **$760,000**.[](https://www.indiatoday.in/business/story/pakistan-airspace-close-india-flights-huge-loss-millions-overflight-fees-reroute-pahalgam-attack-2716107-2025-04-28)[](https://www.businesstoday.in/india/story/never-in-history-such-stupidity-pakistan-loses-millions-as-it-closes-airspace-to-indian-flights-473753-2025-04-27)
PIA, in particular, suffered heavily, losing an estimated **$460,000 per day** due to suspended international routes and increased costs for longer domestic flight paths. By the end of the closure, the combined losses for Pakistan’s aviation sector were staggering.[](https://www.indiatoday.in/business/story/pakistan-airspace-close-india-flights-huge-loss-millions-overflight-fees-reroute-pahalgam-attack-2716107-2025-04-28)
The current closure, announced on April 24, 2025, and set to last at least until May 25, 2025, risks repeating this costly history. With over **800 weekly flights** operated by Indian airlines to destinations in North America, Europe, the Middle East, and Central Asia now rerouting to avoid Pakistani airspace, Pakistan’s daily losses could easily climb into the hundreds of thousands of dollars.[](https://www.financialexpress.com/world-news/airspace-wars-india-to-get-away-with-minor-adjustments-but-pak-airlines-are-losing-millions/3825276/)[](https://indianexpress.com/article/business/pakistan-airspace-closure-800-weekly-flights-indian-airlines-impacted-9965630/)
### Why Pakistan Loses More Than India
While Indian airlines are grappling with longer routes, higher fuel costs (estimated at a 15-30% increase), and potential airfare hikes of 8-12%, they have the operational flexibility and market size to adapt. Flights from northern Indian cities like Delhi, Amritsar, and Jaipur are now taking detours over the Arabian Sea, adding 1-2.5 hours to flight times. Some ultra-long-haul flights, like Air India’s Delhi-New York route, are making refueling stops in cities like Copenhagen or Vienna.[](https://zeenews.india.com/world/losing-millions-how-pakistan-shot-itself-in-foot-with-airspace-closure-for-india-2892937.html)[](https://www.hindustantimes.com/india-news/how-will-pakistan-airspace-closure-impact-indian-passengers-carriers-101745511259987.html)[](https://www.cnbc.com/2025/04/28/pakistan-closure-of-air-space-to-indian-airlines-may-not-increase-costs.html)
However, India’s aviation sector, backed by a robust domestic market and growing international demand, can absorb these costs. In 2019, Indian airlines lost approximately **₹700 crore** (around $82 million) due to Pakistan’s airspace closure, but they managed to recover by adjusting schedules and optimizing routes. This time, airlines like Air India and IndiGo are already issuing travel advisories, suspending unviable routes (e.g., IndiGo’s Delhi-Tashkent and Delhi-Almaty flights), and exploring alternative paths.[](https://indianexpress.com/article/business/aviation/pakistan-airspace-closure-hit-indian-carriers-durations-fuel-cost-9963891/)[](https://indianexpress.com/article/business/pakistan-airspace-closure-800-weekly-flights-indian-airlines-impacted-9965630/)[](https://indianexpress.com/article/business/pakistan-airspace-closure-800-weekly-flights-indian-airlines-impacted-9965630/)
Pakistan, on the other hand, faces a more precarious situation. Its economy, already struggling with a **70% debt-to-GDP ratio**, record-high inflation, and dwindling foreign reserves, cannot afford to lose critical revenue streams like overflight fees. The closure also weakens Pakistan’s aviation relevance, as Indian carriers dominate westbound flights from India, and foreign airlines (which can still use Pakistani airspace) constitute a smaller share of the traffic. As X user Naren Menon pointed out, “Pakistan loses ‘overflight fees’ from the 3rd largest (and fastest growing) aviation market in the world. That’s easily hundreds of millions of USD every year.”[](https://economictimes.indiatimes.com/news/new-updates/after-water-pakistan-may-lose-even-in-air-as-it-loses-around-600-per-flight-by-closing-its-airspace-for-india/articleshow/120722259.cms)[](https://www.businesstoday.in/india/story/never-in-history-such-stupidity-pakistan-loses-millions-as-it-closes-airspace-to-indian-flights-473753-2025-04-27)[](https://www.indiatoday.in/business/story/pakistan-airspace-close-india-flights-huge-loss-millions-overflight-fees-reroute-pahalgam-attack-2716107-2025-04-28)
### The Broader Impact: A Lose-Lose Scenario
Beyond the financial toll, Pakistan’s airspace closure exacerbates regional tensions and disrupts global aviation. Indian passengers face longer flights, higher fares, and potential cancellations, while Indian airlines contend with operational complexities like crew scheduling and payload restrictions. Meanwhile, Pakistan’s aviation sector, including PIA, could face further strain, with suspended routes and reduced connectivity to South and Southeast Asia.[](https://www.hindustantimes.com/india-news/how-will-pakistan-airspace-closure-impact-indian-passengers-carriers-101745511259987.html)[](https://www.firstpost.com/explainers/pakistan-airspace-closure-indian-airlines-ticket-price-long-routes-13882954.html)[](https://www.indiatoday.in/news-analysis/story/what-made-pakistan-open-its-airspace-for-india-1569975-2019-07-16)
The closure also risks isolating Pakistan in the international aviation community. In 2019, international pressure, including from the U.S., played a role in reopening Pakistani airspace after 140 days. With the current closure, Pakistan may face similar diplomatic pushback, especially as its economy teeters on the brink, relying on bailouts from the IMF, Saudi Arabia, the UAE, and China.[](https://www.indiatoday.in/news-analysis/story/what-made-pakistan-open-its-airspace-for-india-1569975-2019-07-16)[](https://economictimes.indiatimes.com/news/new-updates/after-water-pakistan-may-lose-even-in-air-as-it-loses-around-600-per-flight-by-closing-its-airspace-for-india/articleshow/120722259.cms)
### Could India Retaliate?
India is reportedly considering reciprocal measures, such as closing its airspace to Pakistani carriers or banning Pakistani ships from Indian ports. However, Pakistan’s aviation presence in India is minimal, and such a move would have limited impact. India’s focus, as stated by Civil Aviation Minister K Rammohan Naidu, is on working with airlines to mitigate the impact on passengers and carriers, prioritizing safety and operational stability.[](https://economictimes.indiatimes.com/news/new-updates/after-water-pakistan-may-lose-even-in-air-as-it-loses-around-600-per-flight-by-closing-its-airspace-for-india/articleshow/120722259.cms)[](https://indianexpress.com/article/business/aviation/pakistan-airspace-closure-govt-india-airlines-impact-solutions-9970303/)[](https://x.com/IndiaToday/status/1917165259435151366)
### Conclusion: A Self-Inflicted Wound
Pakistan’s decision to close its airspace to Indian airlines may have been intended as a strategic jab, but it’s proving to be a self-inflicted wound. By forfeiting millions in overflight fees, Pakistan is undermining its fragile economy while Indian airlines, though inconvenienced, adapt to the challenge. The 2019 precedent shows that such closures hurt Pakistan disproportionately, with losses mounting daily. As X user @HaloGrad noted, “Pakistan loses overflight revenue, weakens its aviation relevance, and cuts itself out of regional connectivity.”
If the closure persists, Pakistan could face a repeat of the $100 million loss from 2019—or worse, given India’s growing aviation market. For a country already on the edge of economic collapse, this is a gamble that could prove far costlier than anticipated. As tensions simmer, both nations would benefit from de-escalation, but for now, Pakistan’s airspace closure stands as a stark reminder that geopolitical posturing often comes with a hefty price tag.
