The loss was recorded for the fiscal year ended March 31, a period marked by the fatal crash of a Boeing 787 Dreamliner, the closure of Pakistani airspace to Indian airlines, and conflict in the Middle East.
The airline’s majority owner, Tata Group, and Singapore Airlines, which holds a 25.1% stake, are in discussions to inject fresh capital, sources told Bloomberg.
The amount under consideration remains unclear and may fall short of the airline’s needs, potentially forcing Air India to explore additional funding sources.
An Air India aircraft. Photo by Pexels/Ethan Sarkar |
The record loss comes at a pivotal moment for Air India. CEO Campbell Wilson last week said he intends to step down later in 2026. The airline was ranked the worst for safety issues in the aviation regulator’s latest annual audit and, despite ambitious fleet expansion plans, has struggled to improve yields and service standards.
The carrier had begun the fiscal year on a stronger footing, recording operating profits in early April 2025. However, conditions deteriorated after Pakistan shut its airspace to Indian airlines following a brief conflict in May, forcing longer routes to the United States and Europe.
A deadly Dreamliner crash in June that killed more than 240 people further destabilized operations, leading the airline to scale back both international and domestic services.
Additional pressures came from punitive tariffs imposed by U.S. President Donald Trump on India, as well as tighter restrictions on foreign worker visas.
The airline has also been among the foreign carriers most affected by escalating tensions in the Middle East, which accounts for 16% of its total capacity and is now largely suspended, according to the people.
The conflict has further disrupted flights to Europe and the U.S., requiring longer and more costly routes at a time of rising jet fuel prices.
Singapore Airlines, which acquired its minority stake after merging local affiliate Vistara with Air India in 2024, has also seen its earnings weighed down by the carrier’s deteriorating performance.
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