India - Pakistan Standoff 2019

[DivineHeretic]

No wonder I hate IIMers, my sis and brother in law being professors there make no difference either.

Why the hate bro? We come in peace. Not everyone graduates exclusively in Presentation and slides from there.

Nilgri is an engineer. I don't think he's done an MBA.

He has an excellent grasp of economics and finance concepts and their real world application, irrespective of whether he has pursued MBA or Masters in Economics. One of those guys whose posts are a pleasure to read.

@BlackOpsIndia @vstol Jockey @Paro @Shajida Khan
Excellent posts on economic impact of the stand off on the last two pages. It has been a delight to read.
@LoneWolfSandeep thank you for bringing forward the GoI effective ban on flights transiting Pak airspace and the NOTAMs issued by various countries and including various Pakistani and international sources.

To,
@Nilgiri,

Subject : Request for some juicy details with big economic words that I won't understand to show the economic impact of the stand off. Some colourful graphics would be much appreciated.

Sir,
I believe I speak for all the forum members when I say there seems to be a lack of analysis of the economic impact of the recent stand off. While there has been much analysis of weapons and technologies involved(a bit too much if you ask me) there has been no such effort put towards BDA of the economies at play. Economics, as we all agree is a important marker of national strength, sometimes the most important. It tells us a lot about a country's ability of waging war and sustaining it. Knowing the sustaining ability of the adversary is an absolute must in an attrition warfare that we find ourselves in.

Therefore, it is with utmost urgency that I request you to do your bit to enlighten your fellow countrymen on the state of matters in the economic realm and possibly advice us on what steps we ought to be taking to advance and consolidate our lead. Hoping to read a long detailed post from you soon.
Yours Sincerely
@Gautam


There @Falcon, somebody had to do it. Do you think this will work ? I mean he gave me an "F" the last time we discussed economics.

I fully second you. However such an analysis must also include the opportunity costs of Pakistani decisions over the past 2 months and over the forseeable future. Every decision we have forced them to make, has costed capital that has had to be diverted from more productive sectors of the economy, imperilling future growth and capital formation. It is there where Pakistan has been forced to suffer long term losses to cover short term risks. When we create financial models (real options models or monte Carlo models), opportunity costs are a prime focus.

 

[Gautam]

I fully second you. However such an analysis must also include the opportunity costs of Pakistani decisions over the past 2 months and over the forseeable future. Every decision we have forced them to make, has costed capital that has had to be diverted from more productive sectors of the economy, imperilling future growth and capital formation. It is there where Pakistan has been forced to suffer long term losses to cover short term risks. When we create financial models (real options models or monte Carlo models), opportunity costs are a prime focus.

Well @nair and @BlackOpsIndia was saying the other day that discussions here are followed by some important quarters and going forward we will play a role, whatever role that maybe.
Maybe this is one of the roles we can play. Map out what ever damage has been done and chart a path for future course of actions. Let those "important quarters" outsource some "work". We have no lack of weird ideas here.

 

[Gautam]

Swift & sustained retaliation — what Indian Army is discussing at commanders’ meet
In address to top commanders, Indian Army Chief General Bipin Rawat highlighted the changing threats India faces and his vision to counter them.
SNEHESH ALEX PHILIP Updated: 9 April, 2019 3:23 pm IST

Over the past two years, the Minsitry of Defence has ensured that India is equipped to carry out sustained operations if need be | Wikipedia Commons
Text Size: A- A+

New Delhi: Making a quick move to punish the enemy, if needed, and sustaining an intense onslaught for at least 10 days against the other side: The top commanders of the Army are deliberating a recalibration of the force’s strategy in the face of changing threats and operational requirements.
This, along with a review of border infrastructure along the northern and eastern sectors, tops the agenda at the ongoing Army Commanders’ Conference, which started in Delhi Monday and concludes Saturday.
“With changing threats, the Indian Army has to recalibrate its strategy and this is one of the main focus areas of the conference, which mainly centres on operational capabilities,” a senior Army source told ThePrint.
In his address to the top commanders Monday, Army Chief General Bipin Rawat highlighted the changing threats India faces and his vision to counter them.
According to sources privy to the deliberations, the Army’s aim now is to ensure that sustained military pressure is brought on against the Pakistan Army at the Line of Control in the face of provocations, and capabilities enhanced along the northern and eastern borders with China.
Also read: Indian Army warns Pakistan of dire consequences amid heavy artillery exchange on LoC
On the agenda since 2017
Building its capability to carry out a sustained 10-day operation has been on the Army’s agenda since 2017.
When terrorists struck an Army base at Uri, Kashmir, in September 2016, the defence ministry realised that the force was severely under-equipped to carry out a sustained operation if the need arose.
“Following this, a number of steps were taken and a lot of purchases made under the emergency power of the vice-chief,” the aforementioned source said. “We have now reached a comfortable position.”
Refusing to get into the details of the operational purchases made, the source said the acquisitions included anti-tank guided missiles and artillery fuses. Sources said that a large number of orders had been placed with Russia, with talks underway for more Smerch rockets, which have a range of about 90 km.
“The focus is not only on the infantry but also on other services that play a very critical role,” said a second Army source. “Many of the processes initiated have either being completed or are in the process of immediate realisation.”
Also read: Indian Army to get ‘Made in India’ artillery boost with 3 indigenous guns
Hitting back
In light of the ceasefire violations carried out from across the border after the 26 February Balakot air strike of the Indian Air Force (IAF), the Army has been continuously pounding the positions of the Pakistan Army.
When the Pakistan Army resorted to heavy-calibre weapons, India deployed its own heavy artillery like the Bofors among other weapons, which are not being named by ThePrint in deference to operational secrecy.
“A lot many operational handicaps have been taken care of since 2017 and the focus is now to ensure that challenges are dealt with theatre-wise,” a third Army source said.

Swift & sustained retaliation — what Indian Army is discussing at commanders’ meet

 

[LoneWolfSandeep]

On popular demand I decided to share more detailed info on effect of Indian Air space closure to Pakistan both from increased air traffic isolation to Pak & massive overflights free money lost.
This is in continuation to my earlier post, where I also explained how cost will increase dramatically even for direct flight to other countries, which didn't include India, due to supply shortage which get worse.
India - Pakistan Standoff 2019 &
India - Pakistan Standoff 2019

This time the analysis is from 3rd party one region to another, who are providing services stopping in India or Pakistan to travel elsewhere. This is a very important part, as it greatly enhances connectivity & major source of revenue.
Region from Origin of flight - GULF. (Please excuse, India map is not accurate)

GULF countries flight to Asean, China, Korea/Japan region. as was prior to airspace closure (for rough understanding)
Green donates flights halting in Pakistan & orange donates halting in India to their final destination, for general explanation purpose

India - Now flights stopping in India to there destination, simply ignores Pakistan airspace & does longer OverFlight in India, meaning more earning for India.
Pakistan - Lose hefty OverFlight charges

Gulf countries, earlier halting in Pakistan to final destination in Asean & region around
Now gulf flights to travel over Himalayas & Tibet inroute is not feasible for many reasons, extreme weather, sudden extreme high low pressures, lack of landing opportunity in case of any emergency, hence flights would prefer below route

Here they have constant support & options in case of emergency, besides the route is more heavily populated, makes for more economic sense.
Note: Since India is not allowing planes to travel over India airspace via Pakistan, they are forced to Ignore Pakistan halts & travel over more Indian Airspace than usual. Resulting in more Overflight charges for India & loss to Pakistan both in connectivity & free dollars.

China - some may say its not true China, but it is, 80% of Chinese population is in east coast, 20% population in central/western region. Since air traffic is directly proportional to population density, means for 20% population in central & western region of China, due to lack of population density, air traffic might be as little as 10% of eastern China, due to economics.


So what I have shown is most flights from gulf travelling to Asean, China, Koreas/Japan region will ignore Pakistan airspace. Be it direct flight or halt in Pakistan to their final destination. Even if Pakistan was to open its airspace, as long as India don't allow passage, most will avoid overflight to Pakistan.
Ofcource flight from Gulf to Australia, Europe, Africa & Americas wont pass over Pakistan either - so not important to discuss.


So effectively, other than final destination Pakistan flights, it will lose all overflight charges from Gulf countries.
Same is true for flights originating from Americas, Europe, Africa etc. They all miss Pakistan, increase Pakistani person flight cost due to lack of supply & miss out on 100 of million of dollar. It basically working like a embargo on Pakistan.


While on other side in India, will incure some extra cost for domestic carriers for longer traavel, may have to charge slightly more due to increase cost, & increase cost to economy, on other side will result in greater overflight distance by foreign carriers increasing overflight revenue for India. Making it net zero game for economy.
India can even pass the extra revenue so expected from foreign carriers onto domestic carriers, neutralizing their cost.


While Effect on Pakistan is devastating, International flights Isolation (except Pakistan as final destination), many fold increase in travel cost, due to decrease in supply and options available to locals. And 90-95% of earlier Overflight charges (free dollars) lost & increasingly blowing India way.
Hope someone will give a Like for the effort

 

[Ashutosh]

it happens to be true and he knows my counters

Then there is no point in commenting and pointing out to others since only Nilgiri knows your counter argument and we don't. or at least you could link where you have countered him. I'd again urge you to keep points wherein you add some value to the view.

 

[Gautam]

Very informative post. Loved the colourful graphical displays.
A few takeaways for me. :

India - Now flights stopping in India to there destination, simply ignores Pakistan airspace & does longer OverFlight in India, meaning more earning for India.

This seems to imply that the costs associated to over flights is directly affected by duration of flight. In a previous post you have pointed out how cost of over flight is also linked to weight of the aircraft in flight. So, what other factors directly impacts overflight costs ? Is overflight costs more for passenger aircraft or cargo planes or business jets ?

China - some may say its not true China, but it is, 80% of Chinese population is in east coast, 20% population in central/western region. Since air traffic is directly proportional to population density, means for 20% population in central & western region of China, due to lack of population density, air traffic might be as little as 10% of eastern China, due to economics.

Interesting point you make there and it sounds very reasonable. This might also explain why we have less aircrafts over Rajasthan. Simply because of population density.

While on other side in India, will incure some extra cost for domestic carriers for longer traavel, may have to charge slightly more due to increase cost, & increase cost to economy, on other side will result in greater overflight distance by foreign carriers increasing overflight revenue for India. Making it net zero game for economy.
India can even pass the extra revenue so expected from foreign carriers onto domestic carriers, neutralizing their cost.


While Effect on Pakistan is devastating, International flights Isolation (except Pakistan as final destination), many fold increase in travel cost, due to decrease in supply and options available to locals. And 90-95% of earlier Overflight charges (free dollars) lost & increasingly blowing India way.

I must say this seems like a very neat means of economic warfare. Cascading effect of using this for a long period of time is that it might lead to a near death of Pak aviation industry. This in turn will have grave consequences for their import/exports trade.

Speaking of trade, what about shipping ? Can we employ any such means on their shipping industry ? Because Pakistan has some very rough relations with almost all its neighbours(largely their own fault) a land based trade route would just not work. In this backdrop the shipping industry gains importance.

 

[LoneWolfSandeep]

Very informative post. Loved the colourful graphical displays.
A few takeaways for me. :

This seems to imply that the costs associated to over flights is directly affected by duration of flight. In a previous post you have pointed out how cost of over flight is also linked to weight of the aircraft in flight. So, what other factors directly impacts overflight costs ? Is overflight costs more for passenger aircraft or cargo planes or business jets ?

It is both Weight & Distance as its Weight per KM. Hence India will sizable gain Overflight charges from Foreign Carriers, while pak will lose 90-95%

Speaking of trade, what about shipping ? Can we employ any such means on their shipping industry ? Because Pakistan has some very rough relations with almost all its neighbours(largely their own fault) a land based trade route would just not work. In this backdrop the shipping industry gains importance.

No, Unless our Navy starts a naval embargo by force, it cant be done. But if India so decides, not many can break such embargo enforced by India, and if someone plans to interfere, its transit from Indian ocean can be blocked too, so Dragon will keep out of conflict.

If such navel embargo does come in effect - Pakistan best option is land routes -
Afghanistan has already stopped transit route to Pakistan towards central Asian countries, so they cant get many goods from that side.
Iran is already facing Trade sanctions from USA, and cant supply much, besides they still looking for revenge for frequent killing of there Revolutionary guards, last major attack they lost 25, more get frequently killed or kidnapped. So they neither can afford due to sanctions nor good blood.
Only option be via China goods to Pakistan - The Gilgit region is heavily prone to landslides, a few explosions here & there or few bombs from air, will keep the route permanently down for Pakistan.

 

[Ashutosh]

On popular demand I decided to share more detailed info on effect of Indian Air space closure to Pakistan both from increased air traffic isolation to Pak & massive overflights free money lost.
This is in continuation to my earlier post, where I also explained how cost will increase dramatically even for direct flight to other countries, which didn't include India, due to supply shortage which get worse.
India - Pakistan Standoff 2019 &
India - Pakistan Standoff 2019

This time the analysis is from 3rd party one region to another, who are providing services stopping in India or Pakistan to travel elsewhere. This is a very important part, as it greatly enhances connectivity & major source of revenue.
Region from Origin of flight - GULF. (Please excuse, India map is not accurate)
View attachment 5845
GULF countries flight to Asean, China, Korea/Japan region. as was prior to airspace closure (for rough understanding)
Green donates flights halting in Pakistan & orange donates halting in India to their final destination, for general explanation purpose
View attachment 5846
India - Now flights stopping in India to there destination, simply ignores Pakistan airspace & does longer OverFlight in India, meaning more earning for India.
Pakistan - Lose hefty OverFlight charges
View attachment 5847
Gulf countries, earlier halting in Pakistan to final destination in Asean & region around
Now gulf flights to travel over Himalayas & Tibet inroute is not feasible for many reasons, extreme weather, sudden extreme high low pressures, lack of landing opportunity in case of any emergency, hence flights would prefer below route
View attachment 5848
Here they have constant support & options in case of emergency, besides the route is more heavily populated, makes for more economic sense.
Note: Since India is not allowing planes to travel over India airspace via Pakistan, they are forced to Ignore Pakistan halts & travel over more Indian Airspace than usual. Resulting in more Overflight charges for India & loss to Pakistan both in connectivity & free dollars.

China - some may say its not true China, but it is, 80% of Chinese population is in east coast, 20% population in central/western region. Since air traffic is directly proportional to population density, means for 20% population in central & western region of China, due to lack of population density, air traffic might be as little as 10% of eastern China, due to economics.


So what I have shown is most flights from gulf travelling to Asean, China, Koreas/Japan region will ignore Pakistan airspace. Be it direct flight or halt in Pakistan to their final destination. Even if Pakistan was to open its airspace, as long as India don't allow passage, most will avoid overflight to Pakistan.
Ofcource flight from Gulf to Australia, Europe, Africa & Americas wont pass over Pakistan either - so not important to discuss.


So effectively, other than final destination Pakistan flights, it will lose all overflight charges from Gulf countries.
Same is true for flights originating from Americas, Europe, Africa etc. They all miss Pakistan, increase Pakistani person flight cost due to lack of supply & miss out on 100 of million of dollar. It basically working like a embargo on Pakistan.


While on other side in India, will incure some extra cost for domestic carriers for longer traavel, may have to charge slightly more due to increase cost, & increase cost to economy, on other side will result in greater overflight distance by foreign carriers increasing overflight revenue for India. Making it net zero game for economy.
India can even pass the extra revenue so expected from foreign carriers onto domestic carriers, neutralizing their cost.


While Effect on Pakistan is devastating, International flights Isolation (except Pakistan as final destination), many fold increase in travel cost, due to decrease in supply and options available to locals. And 90-95% of earlier Overflight charges (free dollars) lost & increasingly blowing India way.
Hope someone will give a Like for the effort

We aren't losing a penny of over flight charges.. just look at the larger picture.

 

[vstol Jockey]

View attachment 5851

We aren't losing a penny of over flight charges.. just look at the larger picture.

Pakistan's loss is our gain. We are earning revenue at their expense.

 

[LoneWolfSandeep]

View attachment 5851

We aren't losing a penny of over flight charges.. just look at the larger picture.

This is exactly, what I meant, that all countries will avoid travelling over Pakistan Airspace & even gulf flights to Asean/Japan/China etc, will ignore Pakistan & travel over India instead.
Since only final destination flights will travel & carriers cant travel beyond Pakistan onto India, example Europe to Pakistan flight, many such flights continue onto India. How feasible will Spain to Pakistan flight be if it cant come to india, 75-80% are Indians on flight, they wont have enough travelers. And no one runs half empty flights on regular basis. The price will be paid by Pakistan awam & they will get even less options or frequency to boot.

 

[Gautam]

No, Unless our Navy starts a naval embargo by force, it cant be done. But if India so decides, not many can break such embargo enforced by India, and if someone plans to interfere, its transit from Indian ocean can be blocked too, so Dragon will keep out of conflict.

I wasn't talking about using the Navy to enforce a blockade. I was saying if we could deny Pak boats access to our ports, or deny access to foreign shipping companies that work in Pak. Can that be done ?

 

[LoneWolfSandeep]

I wasn't talking about using the Navy to enforce a blockade. I was saying if we could deny Pak boats access to our ports, or deny access to foreign shipping companies that work in Pak. Can that be done ?

With 200% flat charges post MFN withdrawal, trust me no Pakistani ship can afford to dock & trade via our ports. Its already done

 

[Gautam]

We aren't losing a penny of over flight charges.. just look at the larger picture.

Many thanks for this. Really puts things in perspective. Good god look at the density of flights over SE Asia/Koreas/Japan/Eastern China. That's what a developed aviation industry looks like. Ours is still developing, a few more years and with schemes like UDAN we will have similar picture over India.

 

[LoneWolfSandeep]

Many thanks for this. Really puts things in perspective. Good god look at the density of flights over SE Asia/Koreas/Japan/Eastern China. That's what a developed aviation industry looks like. Ours is still developing, a few more years and with schemes like UDAN we will have similar picture over India.

What that picture don't show, is most of that traffic in Asean countries which you see, actually uses Indian airspace in transit. Asean to Asean flights are but a small part only. And almost everything coming from Korea/Japan Taiwan region will use Asean route being central route, like India. Japan is another hub due to USA traffic

 

[Jaymax]

While Effect on Pakistan is devastating, International flights Isolation (except Pakistan as final destination), many fold increase in travel cost, due to decrease in supply and options available to locals. And 90-95% of earlier Overflight charges (free dollars) lost & increasingly blowing India way.
Hope someone will give a Like for the effort

You can put a post with even more details and visuals, hell put a post 10 times the size of this one. Pakistani response will still be

1. Our Army is number 1
2. Lolzz.. Endians are photoshoppers
3. We shot your SU-30, a meteor and one moon of Jupiter

We will have better luck teaching sign language to apes than reasoning with these types.

 

[safriz]

But I think Pakistan has the most strategic detterence I have ever seen. Our ASATs can't touch you because you don't have sats. NOTAMs don't work because planes don't fly much in Pakistan anyway. We can't do anything about it.

Exactly. Sometimes not having things also helps.
We are happy to cause the closure of Indian Air space by Closing ours only for flights to and from India.
India can't do anything about it.

 

[vstol Jockey]

Exactly. Sometimes not having things also helps.
We are happy to cause the closure of Indian Air space by Closing ours only for flights to and from India.
India can't do anything about it.

There are two ways you can get rid of Indians, one is kill them all, second kill yourself. Pakistanis will easily choose the second option going by the kind of logic you have been following.

 

[Guynextdoor]

Exactly. Sometimes not having things also helps.
We are happy to cause the closure of Indian Air space by Closing ours only for flights to and from India.
India can't do anything about it.

I want to know your stand. As per your assessment of yesterday's IAF Presser, are you of the opinion that the radar shows PAF F 16 was shot down or not?

 

[vstol Jockey]

I want to know your stand. As per your assessment of yesterday's IAF Presser, are you of the opinion that the radar shows PAF F 16 was shot down or not?

Hey Bhagwaan, saari Ram Katha phir shroo hogi ab.

 

[Guynextdoor]

Hey Bhagwaan, saari Ram Katha phir shroo hogi ab.

No- I have a very specific question to ask.