Air India expects to face around $600 million in additional costs if a ban from Pakistan's airspace lasts for a year and has asked the federal government to compensate it for the hit, a company letter seen by Reuters shows.

Indian airlines are bracing for higher fuel costs and longer journey times after Pakistan shut its airspace to the country's carriers in a tit-for-tat retaliation following an attack on tourists in Indian-administrated Kashmir last week.

Air India on April 27 asked the Indian government for a "subsidy model" proportionate to the economic hit, estimating a loss of more than $591 million for each year the ban lasts, according to a letter sent by the airline to the Civil Aviation Ministry seen by Reuters.

"Subsidy for affected international flights is a good, verifiable and fair option. The subsidy can be removed when the situation improves," the letter said.

"The impact on Air India is maximum due to airspace closure, additional fuel burn, and additional crew."

Air India declined to comment. India's Civil Aviation Ministry did not immediately respond to a request for comment.

Air India's letter was sent after the government asked its executives to assess the impact of the airspace ban on Indian carriers, said a source with direct knowledge of the matter.

The Tata Group-owned airline is amid a multi-billion-dollar turnaround after a period of government ownership, and growth is already constrained by jet delivery delays from Boeing and Airbus.

It reported a net loss of $520 million in fiscal 2023-2024, on sales of $4.6 billion.

Air India seeks aid

Air India, which has a 26.5 percent market share in India, flies to Europe, the United States and Canada, often crossing Pakistan's airspace. It operates many more long-haul routes than its bigger domestic rival, IndiGo.

In 2019, India said that the closure of Pakistan airspace for about five months caused a loss of at least $64 million to Air India, IndiGo and other airlines.

Aviation experts say Pakistan may also incur some losses, with India also closing the airspace, but no data is available for Islamabad’s losses right now.

One of the sources said Indian carriers met with the Civil Aviation Ministry to work on possible solutions, including flying over difficult terrain closer to China and some tax exemptions.

In its letter, Air India asked the government to liaise with Chinese authorities for certain overflight clearances, without elaborating.

It also asked the government to approve the carrying of extra pilots on flights to the United States and Canada to account for longer travel times.