Pakistan’s decision to close its airspace to Indian airlines has led to a staggering loss of Rs 4.1 billion (approximately Rs 1,240 crore) for the Pakistan Airports Authority (PAA) in just over two months, according to official data reported by Dawn. The financial hit, attributed to a sharp decline in overflying revenue, underscores the economic fallout of escalating tensions with India following the Pahalgam terrorist attack in Kashmir on April 22, 2025, which claimed 26 lives, mostly tourists.

The reciprocal airspace closures began after the attack, blamed on Pakistan-based terror group The Resistance Front (TRF), an offshoot of Lashkar-e-Taiba. Tensions worsened when India launched Operation Sindoor on May 7, targeting terror infrastructure in Pakistan-controlled territories during a four-day conflict. Pakistan’s Ministry of Defence informed the National Assembly on Friday that the ban, effective from April 24 to June 30, impacted 100-150 Indian flights daily, slashing transit traffic by nearly 20%.

The ministry clarified that the Rs 4.1 billion shortfall reflects lost overflight fees, not overall financial losses, with charges remaining unchanged. In 2019, a similar closure cost Pakistan Rs 7.6 billion, while the PAA’s daily overflight revenue has risen from $508,000 in 2019 to $760,000 in 2025, making the current ban costlier.

Also Read: Pakistan Denies India's Jet Downing Claims

Defence Minister Khawaja Asif defended the closure as a strategic response to India’s suspension of the Indus Waters Treaty, emphasizing that “sovereignty and national defense take precedence over economic considerations.” However, the ban, extended until August 24, has also disrupted Indian carriers, with Air India facing up to $600 million in additional costs annually due to longer routes.

While Pakistan’s airspace remains open to all except Indian airlines, and Indian airspace bars Pakistani carriers, the mutual bans continue to strain both nations’ aviation sectors. As diplomatic relations remain frosty, experts warn that prolonged closures could deepen economic losses and further destabilize bilateral ties.

Also Read: Congress Questions PM Modi on Abrupt Halt to Operation Sindoor