Air India Faces Over $1 Billion Hit as Crash, Airspace Closures and Cancellations Disrupt Operations

Air India is facing financial losses estimated at more than $1 billion as a series of severe operational shocks disrupt the carrier’s global network, including a deadly Boeing 787 Dreamliner crash near Ahmedabad, Pakistan’s airspace closure, and widespread flight cancellations.

The convergence of these events has forced Air India to cancel or reroute numerous international services, increasing fuel costs, extending flight times and straining fleet availability. The Pakistan airspace closure in particular has affected long‑haul routes to Europe and North America, significantly raising operating expenses.

The Dreamliner crash has added further pressure, triggering safety reviews, capacity disruptions and reputational challenges at a time when the Tata Group‑owned airline is working to stabilise operations and modernise its fleet.

Industry analysts say the combined impact of safety concerns, geopolitical airspace restrictions and operational disruptions has created one of the most challenging periods for Air India in recent years. The financial hit could delay profitability targets and complicate ongoing transformation efforts.

For passengers, the disruptions have translated into cancellations, longer travel times and reduced connectivity, with ripple effects across global aviation networks that rely on India as a major long‑haul market.