Asian – Dispatch

• Nearly 600 Pakistani flights have been disrupted since war on Iran began on Feb. 28, says expert
• Pakistan has been urged to adopt fuel hedging as jet fuel prices increase following the conflict

Karachi: Pakistan’s aviation sector has suffered losses worth $72 million because of airspace disruptions in the Middle East due to the ongoing war on Iran so far, a Pakistan Airports Authority (PAA) spokesperson said on Thursday.

The US and Israel’s airstrikes against Iran last month disrupted key air corridors worldwide, with several airlines rerouting their flights or canceling them altogether. Much of the Middle East region’s airspace remained closed as the conflict continued for the first few days, with only a limited number of flights departing from a handful of regional gateways in the Middle East.

Hundreds of flights between Pakistan and Middle East destinations such as Dubai, Doha, Abu Dhabi, Muscat, Sharjah and other destinations were canceled as the Middle East war broke out earlier this month.

Five domestic airlines operate in Pakistan, namely the Pakistan International Airlines (PIA), Airblue, Serene Air, Air Sial, and Fly Jinnah. In addition, several major international carriers operate to and from the country, including the Emirates, Qatar Airways, Saudia, Thai Airways and Turkish Airlines.

“These disruptions have led to substantial challenges for airlines, with the broader aviation sector reportedly facing estimated revenue losses of around Rs20 billion ($72 million) in the early phase of these disruptions,” PAA spokesperson Saifullah Khan told Arab News.

Khan, however, clarified that Pakistani airports and airspaces were open, safe and operating normally for civil aviation.

“Decisions on flight operations and cancelations rest solely with individual airlines, based on their own safety assessments and operational requirements,” he explained.

Afsar Malik, an independent aviation expert, said the ongoing conflict has disrupted what he described as “one of the world’s busiest air corridors,” adding that Pakistan was directly in its “line of exposure.”

Malik, a former aviation regulator with the Pakistan Civil Aviation Authority (PCAA), now runs his own aviation consultancy firm Tailwind Aviation.

“Since Feb. 28, more than 500 Pakistan-linked flights have been canceled, with disruptions nearing 600,” he said.

PIA spokesperson Abdullah Hafeez, however, said Pakistani airlines canceled nearly 350 flights since the war broke out last month.

He estimated that if the revenue from a single flight was around Rs10 million ($35,815), the total impact of the flight disruptions should be an estimated Rs3,500 million ($12.5 million) as per “very crude calculations.”

Asked if PIA was taking steps to mitigate risks arising out of the current regional situation, the spokesman said: “You can’t do much. Can’t risk safety over business.”

Malik explained that the $72 million estimated losses reflected “immediate” revenue damage, adding that canceled flights had cascading costs.

“Refunds, passenger reaccommodation and idle aircraft,” he said. “Even operational flights become less efficient, forced into longer routings with higher fuel burn and rising insurance costs tied to war-risk exposure.”

Pakistan’s government increased the price of petrol and diesel each by Rs55 per liter earlier this month. According to Malik, surging fuel prices were also squeezing profit margins.

“If the conflict persists and fuel prices remain elevated, airlines could face sustained financial stress within weeks,” he warned.

‘HEAVILY DEPENDENT ON GULF’

According to Malik, the Iran war has exposed Pakistan’s overreliance on a single air corridor.

“Pakistan’s aviation model is heavily dependent on the Gulf,” he noted.

The aviation expert said Pakistan’s high-volume routes to Dubai, Doha, Abu Dhabi and Jeddah form the backbone of international traffic, driven by laborers, religious tourists and routine visits by Pakistanis to these destinations.

“When they are disrupted, the system does not bend, it breaks,” he observed.

Malik said overseas Pakistanis, who sustain the demand for international travel, are sensitive to instability in the Gulf region, which houses a large diaspora of Pakistani nationals.

“Even when flights resume, hesitation lingers,” he said. “Travel is delayed, plans are deferred, and demand weakens. Cargo flows also tighten as reduced passenger flights cut belly capacity, pushing up freight costs.”

Former PIA CEO Arshad Malik urged Pakistan to adopt fuel hedging, noting that jet fuel comprises around 40-45 percent of operating costs.

“Now, as its price increases and if we must take longer routes, then we face a lot of problems which becomes a major loss for us,” Arshad said.

He urged the government to provide increased and flexible flight slots to Gulf carriers, especially Emirates and Qatar Airways, for around three months as the conflict refuses to let up.

Explaining the concept of “increased slots,” the former PIA CEO said those airlines, instead of operating from destinations such as Dubai, could bring their planes to Pakistani airports and operate flights to Europe and beyond from here.

“We don’t go to the US, we don’t go to Africa,” he said. “So those selected slots should be done centrally with the airlines.”

He said the move would help Pakistan’s aviation cover its landing charges, parking charges and fuel charges, and also boost the domestic hoteling industry.

Source: Arab News PK