New Delhi/Islamabad— In a fresh escalation following the Pahalgam terror attack, Pakistan has shut its airspace to Indian flights after New Delhi downgraded diplomatic ties and suspended key bilateral agreements, including the Indus Waters Treaty. Islamabad’s retaliatory move, aimed at projecting defiance, is expected to severely dent its own fragile economy through substantial losses in overflight revenue.
The airspace closure comes as both nations reduce their diplomatic presence and suspend mutual SAARC visa arrangements. Pakistan claimed the move to block Indian planes from its skies was a “strong response” to India’s diplomatic offensive. However, aviation experts and economic analysts suggest the decision may backfire financially for Pakistan.
According to estimates, Pakistan stands to lose millions of dollars in overflight fees—a crucial income source for its Civil Aviation Authority (CAA). Overflight fees are payments made by international airlines for using a country’s airspace without landing. These funds typically support air traffic control services and aviation infrastructure.
Historical data underscores the financial risks. During the 2019 airspace closure after the Pulwama terror attack and India’s Balakot airstrikes, Pakistan reportedly lost over $50 million in overflight revenue within a few months. At the time, around 400 daily flights were affected, with Boeing 737 aircraft alone incurring approximately $580 per crossing. Daily losses were pegged at $232,000 in overflight fees and around $300,000 when landing and parking charges were included.
While Indian carriers are experiencing a 15–30% rise in fuel costs due to longer detour routes, aviation insiders say the monetary blow to Pakistan is far greater. “India has alternate flight corridors and financial resilience. Pakistan, meanwhile, is forfeiting millions it can scarcely afford to lose,” said an aviation industry observer.
The decision also affects Pakistan International Airlines (PIA), already battling mounting debt and a shrinking international presence. The cumulative financial strain could deepen the crisis in the aviation sector, which is already reeling from poor management and international restrictions.
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