Follow real-time updates on Union Budget 2023Catch exclusive videos on Union Budget 2023 from CNBC-TV18
If Pakistan wants the international community to take its economy seriously, they need to focus on building relationships, not breaking them over some other countries constitution.
Pakistan Prime Minister Imran Khan is reportedly considering closing the country’s airspace to India. Pakistan reopened its airspace to India in mid-July, more than five months after it closed it over the Balakot air strikes.
Recommended ArticlesView All
Budget 2023: Taking a bold step to unlock India’s potential
Feb 2, 2023 IST2 Min(s) Read
Budget 2023: Moving closer towards universal health through proper implementation is key
Feb 2, 2023 IST3 Min(s) Read
Explained: Pakistan economy on the edge of collapse — why India may be worried
Feb 2, 2023 IST10 Min(s) Read
Budget 2023: Unleashing India’s growth potential in the years to come
Feb 2, 2023 IST2 Min(s) Read
Reports of the closure come as bilateral tensions have resurfaced again this month when the Indian government revoked Kashmir's special constitutional status.
Closure of the airspace hurts airlines from India. Hundreds of flights carrying passengers and cargo are forced into long detours that cost millions of dollars.
The location of Pakistan is crucial because it lies smack in the middle of an important air corridor. Even international carriers such as Singapore Airlines, British Airways, Thai Airways, and Lufthansa were affected by the previous airspace closure.
According to FlightRadar24, more than 300 flights were being affected every day. Pakistani airspace is divided into two Flight Information Regions (FIR) — Lahore and Karachi. Both had a huge drop in transiting traffic. In fact, this chunk of traffic ended up with Mumbai air traffic control (ATC) because flights had to take a bypass route via the Arabian Sea.
Mumbai ATC usually handles 750 overflying or transiting flights each day. This surged to 1,200 per a due to Pakistan's airspace closure. Even Indian airlines such as Air India and IndiGo had to opt for longer routes to bypass Pakistan's airspace.
What to make of Pakistan’s bravado? Closing itself off from the world to prove a point is a very risky bet for any world. And, Pakistan should think rationally.
How are financials affected?
Pakistan's aviation minister said that his country suffered loses of over PKR 8 billion ($50 million, or Rs 332 crore under current exchange rates) from airspace restrictions. This includes the income ATC's get for handling overflying flights.
This is a significant income loss for a country whose economy is in the doldrums. Foreign investment is declining, debt is rising, and there's no buffer reserve to go back to. If Pakistan wants the international community to take its economy seriously, they need to focus on building relationships, not breaking them over some other countries constitution.
How much are India’s airlines affected by the airspace closure?
On the flip side, a closure will definitely affect India. According to India's civil aviation minister, national carrier Air India lost Rs 491 crore until July 2, while IndiGo suffered a loss of Rs 25.1 crore till May 31. SpiceJet and GoAir lost Rs 30.73 crore and Rs 2.1 crore, respectively till June 20 due to the Pakistan airspace closure. These losses are minuscule stacked for an economy of India’s size.
Here only Air India’s loss is significantly high. Air India, backed by the government of India, is the only Indian airline that can boast of substantial overseas operations. Private players have a lower exposure because of international penetration in Europe and Central Asia.
Four months is a long period in aviation, and Pakistan needs to ensure it doesn’t make bypassing its airspace a “norm”. Because the inconvenience will soon become mainstream, and airlines as well as passengers will plan their fares and plans accordingly.
India is among the fastest-growing economies in the world and the aviation industry is crucial for communication. This ensures solid demand, in turn, making airlines accommodate longer routes and adjust schedules accordingly.
During the closure, Lufthansa adjusted routes and increased the amount of additional fuel in the event of delays. So did Emirates, Etihad, Air France, and more continued to fly with adjustments.
A few airlines such as Air Astana, Air Canada, and United had to cancel flights. But these gaps were filled up by Air India, and United has already announced the reopening of routes.
In the end, a closure is definitely a "hassle" for India. But, it's still not enough for India to go begging for relief. And, the international community is watching. Slowly, international pressure on Pakistan is bound to increase.
Shivam Vahia is a developer by hobby and an avid aviation geek.
First Published: Aug 28, 2019 2:03 PM IST