Hoax bomb threats could leave deep financial scars on India's airlines

Threats could result in significant financial losses for targeted carriers, analysts warn

Repeated threats can have detrimental effects on airlines' credibility and trustworthiness among passengers. AFP

A series of hoax bomb threats that hit many Indian airlines this week, leading to flight detours and schedule disruptions, could have long-term consequences for airlines that go beyond the financial costs, analysts warn.

Indian airlines, including Air India and IndiGo, received more than 20 bomb threats on their international and domestic routes, all of which turned out to be false alarms. Other Indian carriers received similar threats.

“These threats have far-reaching implications, both financially and operationally,” said aviation lawyer Neha Singh of Indian law firm Trilegal.

“Direct costs include refunds, passenger compensation and operational expenses already incurred. Indirect costs arise from rebooking passengers, providing accommodation and addressing logistical challenges, such as crew scheduling.”

The hoaxes caused major disruption. An Air India Express plane on Tuesday had to be escorted by Singaporean fighter jets to Changi airport. An Air India flight from New Delhi to Chicago had to make an emergency landing in Canada because of a threat.

Such emergency landings often necessitate fuel dumping, which causes immediate financial losses to the carrier and leads to environmental concerns, Ms Singh said.

She estimates that, for domestic routes, the direct cost to airlines for each incident can range from $60,000 to $65,000. These costs are far higher for international flights.

Because the incidents involved a threat and route diversions are precautionary response, the extra costs incurred by airlines are not covered by insurance, analysts said. Bloomberg

While expenses vary depending on aircraft types and routes, Mark Martin, chief executive at aviation consulting firm Martin Consulting, said the “total impact per flight over international airspace and territory is about $500,000 for the unscheduled landing, emergency services, evacuation flight, passenger accommodation and liabilities”.

As such incidents involve a threat and are precautionary responses, all these extra costs incurred are not covered by insurance, he said.

“In the long term, there is the cost of total disruption of the flight schedule, sending additional aircraft, operating delayed flights, lease rental costs, revenue loss and paying for security liabilities and emergency landing charges,” said Mr Martin.

According to Ms Singh, opportunity costs also need to be taken into consideration, she said. These can include lost revenue from ticket sales and potential future bookings due to reputational damage.

Such incidents – although not the fault of the airline – can still “damage an airline's reputation, making it appear unsafe or unreliable”, she explained.

Police in India this week arrested a minor for allegedly posting bomb threats online. Ram Mohan Naidu Kinjarapu, the country's civil aviation minister, said: “We are closely monitoring the situation and ensuring that every necessary measure is taken against such actions.”

The Indian airlines targeted have said they are working with authorities.

“Collaboration between authorities and airlines is vital in addressing and mitigating the effects of such threats,” said Ms Singh. But far more needs to be done to prevent such disruption in the future, she added.

“While legal actions, including filing complaints with enforcement agencies and prosecuting offenders under relevant laws are essential, the industry must also focus on enhanced monitoring and public awareness campaigns to reduce the frequency of these incidents.”