Airspace Restrictions Continue to Hurt Indian Carriers
SINGAPORE — Singapore Airlines Chief Executive Officer Goh Choon Phong has identified the continued closure of Pakistani airspace as one of the biggest operational disadvantages facing Air India, highlighting a challenge that uniquely affects Indian carriers competing on long-haul international routes.
The comments came during a post-results investor call after Singapore Airlines released its latest financial results. Goh’s remarks mark one of the first direct acknowledgements from a major international airline executive that the restriction has materially weakened Air India’s position against foreign competitors operating flights between India, Europe, and North America.
Air India, which is owned by the Tata Group, has been dealing with a combination of operational disruptions, rising costs, regulatory scrutiny, and fleet-related challenges while continuing its large-scale transformation program.
“The closure of Pakistani airspace affects only Indian-based operations, not anyone else,” Goh said during the investor call on Friday.
The airspace restriction, which has remained in place for Indian operators since April last year, forces Air India and other Indian carriers to take longer flight paths on routes to Europe and North America. The detours increase flight time, fuel consumption, crew expenses, and overall operating costs.
Air India Faces Growing Financial Pressure
The operational strain has added to Air India’s already mounting financial difficulties. According to Singapore Airlines’ annual report, the Indian carrier is projected to post a loss of nearly $3 billion, or approximately ₹28,400 crore, in FY26. The figure is nearly three times higher than the loss recorded in FY25.
Singapore Airlines, which owns a 25.1% stake in Air India following the Vistara merger, said its share of losses from the Indian airline significantly impacted its own annual earnings.
The financial impact on Singapore Airlines from its Air India investment stood at $742.4 million, equivalent to S$945.2 million based on current exchange rates.
Industry analysts say the Pakistani airspace closure continues to create a structural disadvantage for Indian airlines that foreign competitors do not face.
Gagan Dixit, Senior Vice President for Aviation, Chemicals, Oil & Gas at Elara Capital, said the restriction has become a major operational burden for Air India.
He noted that longer routings directly increase costs while foreign airlines continue to operate more efficient flight paths through Pakistani airspace.
Air India Chief Executive Officer Campbell Wilson had previously stated in October that the ongoing closure had resulted in losses of approximately ₹4,000 crore over a one-year period.
Crash and Regulatory Scrutiny Add to Challenges
Singapore Airlines also pointed to the June 2025 Air India crash as another major factor behind the airline’s underperformance.
The incident triggered stricter regulatory oversight and additional safety inspections across Air India’s operations, slowing parts of the carrier’s transformation efforts and affecting operational flexibility.
“The June crash and regulatory scrutiny impacted Air India’s agility,” Dixit said.
The depreciation of the Indian rupee against the US dollar has further increased pressure on the airline’s finances. Aircraft leasing expenses, maintenance contracts, and several operational costs are largely paid in dollars, making them more expensive in rupee terms.
Fleet Delays and Rising Fuel Costs Continue
Beyond the airspace issue, Singapore Airlines highlighted broader global aviation challenges affecting Air India’s recovery plans.
Supply chain disruptions continue to delay aircraft deliveries and cabin retrofit programs across the industry. At the same time, geopolitical tensions and the ongoing West Asia conflict have increased fuel prices and disrupted important flight routes.
Goh described these developments as external pressures beyond the airline’s control.
Analysts believe fleet modernization remains one of Air India’s most urgent priorities. Dixit said the airline requires faster aircraft deliveries from Boeing and Airbus to improve fuel efficiency and reduce operating expenses.
“The airline also needs a new fleet, faster deliveries from Boeing and Airbus. A fuel-efficient fleet would bring down maintenance and operational costs by 15-20%,” Dixit said.
He added that Air India may also have limited ability to continue raising fares, with international ticket prices already up 40% year-on-year and domestic fares rising around 15%.
Leadership Transition Underway
Air India is also navigating a leadership transition during a difficult financial period.
Chief Executive Officer Campbell Wilson resigned in March and is currently serving his notice period. The airline has not yet announced his replacement.
Goh confirmed that the decision regarding Wilson’s successor would be made by Air India’s board of directors, chaired by Tata Sons Chairman N Chandrasekaran. Goh himself serves as one of the seven board members.
As part of ongoing cost-control efforts, Air India has reduced certain international services and delayed employee increments and bonus payments.
Singapore Airlines Maintains Long-Term Confidence
Despite the financial setbacks, Singapore Airlines said it remains committed to supporting Air India’s long-term transformation strategy.
Goh said India continues to represent a key growth market for Singapore Airlines and remains central to the group’s broader multi-hub strategy.
“But this is a market that holds tremendous potential. Now the potential of India is even more obvious,” Goh said.
He did not provide a timeline for Air India’s turnaround or discuss any potential additional capital support from Singapore Airlines, but indicated that shareholders would continue monitoring the airline’s progress closely.
