New Delhi – Air India is projected to post a record annual loss of at least ₹15,000 crore (approximately $1.6 billion) for the financial year ending March 31, 2026, according to people familiar with the matter, marking the worst financial performance since Tata Group and Singapore Airlines took control of the carrier.
The massive setback comes after two major crises in 2025 wiped out years of restructuring progress: the deadly crash of Air India Flight 171 in Ahmedabad on June 12, 2025, and the prolonged closure of Pakistani airspace to Indian carriers following military tensions between the neighbouring countries.
Air India Flight 171, a Boeing 787-8 Dreamliner carrying 242 people, crashed into the hostel block of B.J. Medical College just 32 seconds after takeoff from Sardar Vallabhbhai Patel International Airport in Ahmedabad. Of the 242 aboard, 241 were killed, with only one passenger surviving, according to Air India’s official statement on June 12, 2025. On the ground, 19 people were killed and 67 others were seriously injured, as reported by Wikipedia citing official sources.
According to India’s Aircraft Accident Investigation Bureau preliminary report released on July 12, 2025, both engines shut down within one second after the fuel control switches moved from “RUN” to “CUTOFF” positions three seconds after liftoff. Al Jazeera reported that the crash remains under investigation, with the cause of the switch movement still undetermined.
The accident triggered significant compensation payouts, fleet groundings, enhanced safety inspections, and higher insurance premiums. Air India temporarily reduced services operated by Boeing 787 and 777 aircraft from June 21 to at least July 15, 2025, to accommodate enhanced pre-flight safety checks, according to the airline’s June 18, 2025 statement.
The carrier’s financial strain was compounded by Pakistan’s decision to close its airspace to all Indian airlines on April 24, 2025, following the Pahalgam terrorist attack that killed 26 people on April 22, 2025. According to Wikipedia’s entry on the 2025 Pakistani airspace closure, Pakistan extended the ban multiple times, with the most recent Notice to Airmen extending restrictions until January 23, 2026.
The airspace closure forced Air India and other Indian carriers to operate longer routes to Europe and North America, substantially increasing fuel and operating costs. According to a PTI report cited by Outlook Business on May 1, 2025, Indian airlines were incurring an additional 77 crore per week, or over 306 crore per month, due to the longer routes. Flights to North America now take up to 1.5 hours longer, adding around ₹29 lakh in extra operating costs per trip, while European flights face added costs of around ₹22.5 lakh per trip, the report stated.
Air India cargo operations head Gagan Gupta told the IICS 2025 conference that the airspace closure resulted in higher fuel consumption across affected routes, according to ITLN Aviation on December 20, 2025. He noted that passenger numbers on the Bengaluru-London route increased for other carriers but not for Air India, as the airline operates longer routings due to the closure.
According to Business Standard on January 22, 2026, government filings compiled by business intelligence platform Tofler show that Air India has accumulated losses of *32,210 crore over the past three years. The airline sought at least ₹10,000 crore in fresh financial support last year as part of its restructuring drive, Bloomberg News reported in October.
Management had submitted a five-year business plan projecting profitability by the third year, but the proposal was rejected by the board, which has asked for a more aggressive turnaround roadmap, according to people familiar with the matter cited by Business Standard.
Prior to these crises, Air India had shown signs of stabilisation. The Tata Sons FY24 annual report showed that Air India narrowed standalone losses to ₹4,444 crore in FY24 from ₹11,388 crore in FY23, according to Aviation A2Z on October 9, 2024. The national carrier’s turnover surged 23 percent to ₹38,812 crore during this period.
For FY25, Air India reported a consolidated net loss of ₹10,859 crore despite generating revenue of ₹78,636 crore, according to Tata Sons’ latest annual report cited by Aviation A2Z on July 24, 2025. The airline had been targeting operational breakeven in FY26 before the June crash derailed those plans.
The mounting losses have raised concerns among both shareholders. Tata Group has begun scouting for a new chief executive officer to replace Campbell Wilson, though the leadership transition is expected only after the official crash investigation report is made public, according to people familiar with the matter cited by Business Standard and News9live on January 22, 2026.
Singapore Airlines, which holds a 25.1 percent stake following the merger of Vistara with Air India in 2024, has seen its earnings weighed down by the Indian carrier’s performance, Business Standard reported. The airline continues to support Air India’s restructuring, including efforts to bring aircraft maintenance operations in-house.
Air India is jointly owned by Tata Group (74.9 percent) and Singapore Airlines (25.1 percent). The carrier operates as India’s flag carrier with its main hub at Indira Gandhi International Airport in Delhi and secondary hubs at Kempegowda International Airport in Bengaluru and Chhatrapati Shivaji Maharaj International Airport in Mumbai, according to Wikipedia. Spokespersons for Air India, Tata Group, and Singapore Airlines did not respond to requests for comment on the projected losses, Business Standard reported on January 22, 2026.
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