Here are some more details...
The visa in question is the so-called "Airport Transit Visa", and is a requirement of certain European countries, not airlines.
These European countries are the ones that form the so-called "Schengen" region, which currently comprises of Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Luxembourg, Norway, The Netherlands, Portugal, Spain and Sweden (in my earlier post, i had mentioned 6 countries... evidently more have jumped on the bandwagon since i last travelled).
Nationals of certain countries are required to obtain an "airport transit visa" if, while transiting through an airport in a Schengen country, they need to disembark to change planes. The U.K. and Switzerland are not part of the Schengen group, therefore you do not need an airport transit visa for those countries. If you are flying Air-India or Pakistan International, you usually would not need to change planes, hence in this case, too, you won\'t need a transit visa.
This rule has been in place for nationals of Pakistan for some years; it seems from the postings that they have now included Indian nationals as well.