Rs 1,240 crore gone: Pakistan’s airspace ban on India backfires economically

Pakistan has faced massive financial losses after closing its airspace to Indian-registered aircraft, with the Pakistan Airports Authority (PAA) losing more than Rs 1,240 crore (PKR 4.1 billion) in just over two months. The loss, reported by the Ministry of Defence in a statement to the National Assembly on Friday, highlights the economic consequences of Islamabad’s decision.

The ban, which came into effect on April 24, followed Pakistan’s retaliation to India’s suspension of the Indus Waters Treaty on April 23. Islamabad withdrew overflight permissions for all Indian-registered aircraft, as well as those operated, owned, or leased by Indian carriers. The move was positioned as a strategic measure, but the financial fallout has been severe.

According to Dawn, the PAA’s revenue from overflying charges plummeted between April 24 and June 30, affecting between 100 to 150 Indian aircraft daily and slashing Pakistan’s transit air traffic by almost 20%. The closure of airspace also cost Pakistan more now than during previous standoffs. The PAA’s average daily revenue from overflights was $508,000 in 2019 and rose to $760,000 in 2025. As a result, Pakistan’s decision is proving far more costly compared to past confrontations.

While acknowledging the financial setback, the Pakistani defence ministry defended the airspace closure, stating, “Sovereignty and national defence take precedence over economic considerations.” Officials claimed the decision was made for “strategic and diplomatic” reasons, communicated through Notices to Airmen (NOTAMs).

The airspace standoff began after the Pakistan-sponsored terror attack in Pahalgam, Jammu & Kashmir, on April 22, which killed 26 people. In retaliation, India banned all Pakistani-operated, owned, or leased aircraft from entering Indian airspace starting on April 30. The ban on Indian flights, however, remains in effect, with the latest extension scheduled to last until the last week of August.

Meanwhile, Indian carriers have been unaffected in other international routes, and Pakistani airlines continue to be barred from entering Indian airspace. The Minister of State for Civil Aviation recently confirmed that the NOTAM restricting Pakistani aircraft would be extended until August 23, 2025.