Air India Posts Wider-Than-Expected Annual Loss of $2.4 Billion

Air India Ltd. has reported a staggering annual loss of more than 220 billion rupees ($2.4 billion) for the fiscal year ended March 31. This loss is significantly higher than the $1.6 billion internal company loss estimate reported by Bloomberg News in January.

The airline's financial woes can be attributed to a series of unfortunate events, including the crash of a Boeing Co. 787 Dreamliner in June, which killed over 240 people. The closure of Pakistani airspace to Indian carriers and the Middle East conflict also had a devastating impact on Air India's operations. The airline was forced to reduce international and domestic services, resulting in a significant decline in revenues.

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Air India's controlling shareholder, Tata Group, and Singapore Airlines Ltd., which owns 25.1% of the carrier, are engaged in talks to inject some much-needed cash into the airline. However, the size of the infusion is still being discussed, and it may be less than what the carrier needs, prompting Air India to explore other financing options.

Air India's Chief Executive Officer, Campbell Wilson, announced his intention to step down later this year, and the airline has been ranked worst for safety issues in the aviation regulator's latest annual audit. Despite ambitious fleet expansion plans, Air India has struggled to lift yields and improve service to desired levels. Stemming the losses has been set as one of the key conditions for approving a third term for Tata Group Chairman Natarajan Chandrasekaran.

The airline had started the fiscal year on a positive note, posting operating profits in the first few weeks of April 2025. However, the series of crises, including the closure of Pakistani airspace, the Middle East conflict, and the deadly crash of the Boeing Dreamliner, have thwarted Air India's target to break even operationally in the fiscal year ended March 31. The airline has also been one of the foreign carriers most affected by the outbreak of hostilities in the Middle East, which accounts for 16% of its total capacity.