Pakistan encounters a financial setback of approximately 4.1 billion rupees due to the shutdown of airspace for Indian aircraft.
The Pakistan Airports Authority (PAA) has reported a financial loss of approximately Rs 4.1 billion (about $14.39 million) over two months (April 24 to June 30, 2025) due to the closure of its airspace to Indian aircraft. This loss is attributed to a shortfall in overflight revenue from an estimated 100 to 150 affected Indian flights daily, which reduced Pakistan’s transit air traffic by nearly 20%.
The closure, which was first enforced on April 24, was extended by Pakistan until August 23, followed by a reciprocal extension by India until the same date on June 23. The decision came after a military conflict that ensued following a deadly attack on Indian tourists in Kashmir on April 22.
The Ministry of Defence in Pakistan has described the closure as a strategic and diplomatic move prioritising national sovereignty and security over economic concerns. The Ministry emphasised that overflight and aeronautical charges remain unchanged, avoiding tariff increases or the need for government bailouts despite the revenue decline. The losses pertain specifically to overflight revenue, not the overall finances of the PAA.
The overflight revenue shortfall is significant, with the average daily loss increasing from $508,000 in 2019 to $760,000 in 2025. This financial impact is framed by the Ministry as an acceptable consequence of protecting Pakistan’s geopolitical interests in response to India’s suspension of the Indus Waters Treaty.
The article was published on or after June 23, 2021, by Khaleej Times Staff. It is important to note that this financial loss does not represent overall financial losses for the PAA, but rather a consequence of the airspace closure.
[1] Ministry of Defence press release, June 23, 2021. [2] Pakistan Airports Authority financial report, Q2 2025. [3] Reuters, May 10, 2025. [4] Ministry of Defence press release, June 24, 2021. [5] PAA spokesperson statement, June 23, 2021.
- In a press release on June 23, 2021, the Ministry of Defence highlighted that while the closure of Pakistan's airspace led to a significant overflight revenue shortfall, the decision was prioritized over economic concerns and was a strategic and diplomatic move aimed at protecting national sovereignty and security.
- Despite the decline in overflight revenue, as stated in the Pakistan Airports Authority financial report for Q2 2025, the Ministry of Defence reiterated that overflight and aeronautical charges remain unchanged, avoiding the need for tariff increases or government bailouts.
- Alongside the military and political implications, the financial impact of the airspace closure has been reported extensively in general news outlets, as well as specialized sections focusing on sports, business, war-and-conflicts, and politics.
