Pakistan has incurred massive financial losses amounting to over Rs 1,240 crore (PKR 4.1 billion) in just over two months after closing its airspace to Indian-registered aircraft, according to figures presented by the Ministry of Defence in the National Assembly and reported by the leading Pakistani daily Dawn. The closure, which came into effect on April 24, was implemented as a retaliatory measure following India’s suspension of the Indus Waters Treaty on April 23 in the wake of the April 22 terror attack in Pahalgam, Jammu & Kashmir, that killed 26 civilians.
The action has, however, curtailed Pakistan’s income by a substantial amount from overflight fees. Data released by the government indicates that the Pakistan Airports Authority (PAA) lost PKR 4.1 billion between April 24 and June 30, 2025. The ban has affected close to 100 to 150 Indian aircraft on a daily basis, resulting in a steep 20 per cent decline in overall transit air traffic. The restriction is extended to all Indian-registered aircraft and airplanes operated, owned, or leased by Indian carriers.
Pakistan Asserts Sovereignty Trumps Economy
Defence Minister Khawaja Mohammad Asif acknowledged the revenue deficit but asserted that national defence and sovereignty were more important than fiscal concerns. “Though there are financial losses, sovereignty and national defence are given priority over economic issues,” the ministry said in a statement to Parliament. Government officials explained that the losses refer only to overflying revenue, not the general finances of the PAA, and included that overflight and aeronautical fees remained flat without resort to tariff increases or government bailouts.
PAA’s average daily overflight revenue, according to the ministry, has increased sharply over the past few years, from USD 508,000 in 2019 to USD 760,000 in 2025. That makes this year’s closure more expensive for Pakistan than the 2019 airspace restriction, when losses were estimated at Rs 7.6 billion ( USD 54 million). That time, the closure was revoked after a few months due to cross-border tensions.
The Pakistani Defence Ministry informed parliamentarians that airspace restriction decisions are made at the federal government level and implemented through NOTAMs for “strategic and diplomatic purposes.” The ministry underscored that “keeping Pakistan’s airspace safe from perceived threats is more important than losing revenue,” a similar claim during the last 2019 closure. But aviation industry officials note that with transit air traffic off 20 per cent, the shutdown not only impacts PAA’s revenues but also threatens to drive international carriers to make permanent route decisions, which could affect Pakistan’s long-term status as a regional transit point.
India Extends Mutual Prohibition On Pakistani Aircraft
As a tit-for-tat measure, India also banned Pakistani-owned, operated, or leased military aircraft from flying in Indian airspace since April 30. Union Minister of State for Civil Aviation Murlidhar Mohol validated that the Notice to Airmen (NOTAM) banning Pakistani flights over India has been extended up to August 23 due to prevailing security measures and strategic factors. In the meantime, Pakistan’s closure to Indian planes has already been prolonged twice and is now scheduled to continue until August 24.
The standoff has had no impact on Indian carriers on other overseas routes, while Pakistani carriers are still subject to a full ban on Indian skies. This is alongside other punitive actions adopted by India following the Pahalgam attack, such as suspending the Indus Waters Treaty, reducing diplomatic relations to a low level, and imposing a blanket ban on bilateral trade.
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The April 22 terror attack in Pahalgam, claimed by Lashkar-e-Taiba’s offshoot The Resistance Front (TRF), triggered a sharp escalation in Indo-Pakistani tensions. India’s subsequent actions, including Operation Sindoor, which downed at least five Pakistani jets using the S-400 air defence system, were accompanied by sweeping diplomatic and economic measures. Pakistan’s airspace ban was one of its most visible retaliatory steps, but the financial data now suggests it has caused more economic harm to Islamabad than to New Delhi.
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At the moment, there is no sign from either government of a rollback of restrictions. The simultaneous NOTAMs issued by India and Pakistan have to expire by the last week of August, but both administrations have signaled that renewals are probable unless there is a change in the existing security environment.