India’s aviation sector is grappling with escalating operational and financial strain as Pakistan on Wednesday extended its ban on Indian aircraft using Pakistani airspace, deepening a diplomatic standoff that began in late April. The restriction has forced Indian carriers to reroute more than 800 weekly flights, particularly those operating from northern India to Western destinations, Central Asia, and North America.

For India’s largest international carrier, the financial fallout has become severe. Internal documents submitted to the government show a sharp deterioration in profitability, with fuel expenses rising by up to 29 percent on select long-haul routes due to extended flight paths. The airline now estimates an annual profit-before-tax hit of $455 million, surpassing its reported $439 million loss for fiscal year 2024–25. Longer journey times—often stretching by as much as three hours—have rendered several routes commercially unsustainable, prompting the suspension of the Delhi–Washington DC service.

These pressures come amid ongoing requests for temporary government support and unresolved legacy tax liabilities totaling $725 million, pushing the carrier deeper into financial distress.

Passengers, meanwhile, are facing higher travel costs and fewer options. International airfares on key routes could rise 35–40 percent as airlines absorb increased fuel burn and operational delays. Foreign carriers, still permitted to overfly Pakistani airspace, are capitalizing on the situation with faster connections, drawing Indian travelers away. Multiple travel platforms report a noticeable shift toward these airlines.

To cope with higher fuel consumption on lengthened routes, Indian carriers have also reduced passenger and cargo loads by up to 15 percent on flights such as Delhi–New York and Delhi–Vancouver, further shrinking non-stop travel availability.