Pakistan Airspace Closure Backfires with Massive Financial Losses

Pakistan's decision to shut its airspace to Indian-registered aircraft has resulted in significant financial setbacks, with the Pakistan Airports Authority (PAA) reporting losses exceeding Rs 1,240 crore (PKR 4.1 billion) over a span of just two months. A statement by the Ministry of Defence disclosed these losses to the National Assembly, as reported by Dawn on Friday. The closure was a countermeasure to India's suspension of the Indus Waters Treaty on April 23 and came into effect on April 24, severing overflight permissions for Indian carriers.

The economic repercussions of this action have been substantial. From April 24 to June 30, the PAA saw a sharp decline in overflying charges, affecting approximately 100-150 Indian aircraft daily and reducing Pakistan's transit air traffic by nearly 20 percent, according to Dawn. While the financial impact was acknowledged by the Pakistani defense ministry, they maintained that national sovereignty and defense priorities outweigh economic interests. Officials referenced Notices to Airmen (NOTAMs) considering 'strategic and diplomatic' issues as justification for the measures.

PAA's revenue data reveal a stark contrast: in 2019, the average daily overflight earnings were $508,000, soaring to $760,000 in 2025, indicating current losses exceed previous confrontations. Despite the open airspace to non-Indian flights, the ban has been extended twice, now projected to last until late August. Meanwhile, Indian flights proceed unbothered on other international paths, while Pakistani flights remain prohibited from Indian skies since the April 22 terrorist attack in Jammu & Kashmir. India's restrictions on Pakistani aircraft, including military flights, began on April 30, with extensions till August 23, 2025, as per Minister of State for Civil Aviation Murlidhar Mohol, who cited security and strategic objectives.

(With inputs from agencies.)