Air India posts largest annual loss amid operational and geopolitical challenges
Airline’s business transformation programme is also taking longer than expected, notes parent Tata Group. Air India has disclosed its worst-ever full-year loss since going private, as it blamed three "external headwinds" that upended restructuring momentum. The Star Alliance operator reported a net loss of Rs222.4 billion ($2.3 billion) for the year to 31 March, a significantly steeper loss compared to a Rs109 billion net loss in the previous financial year. This comes as the carrier, which was privatised under the Tata Group in 2022, saw a 9% dip in its full-year revenue to Rs701 billion. Air India's financial results were disclosed as part of the Tata's annual report. The airline does not disclose further details on its full-year costs. Air India's steeper losses come as the airline deals with multiple operational challenges: the continued airspace closure over Pakistan – a result of a 2025 conflict between the two neighbouring countries – has forced Indian carriers to re-route their west-bound flights, adding extra operational costs. This has been compounded by the spike in fuel costs from the Middle East conflict earlier this year, as well as foreign exchange "fluctuations". The most significant of these challenges has been the fatal crash of an Air India Boeing 787-8 in Ahmedabad in June 2025. The airline’s heavy losses have also impacted the earnings of shareholder Singapore Airlines Group, which swung to its first post-pandemic net loss for the quarter ended 30 June. In the group's annual report, Tata chairman N Chandrasekaran says the airline has had "the most challenging year" given the "external headwinds" it faced. He notes: "Few businesses are as vulnerable to war and fuel pressures as aviation." More crucially, the chairman notes Air India's transformation "must be seen as a five- to ten-year journey", suggesting that the beleaguered carrier's business restructuring is taking longer than initially planned. When Air India was first taken private in 2022, the airline rolled out an ambitious five-year transformation plan – called Vihaan.AI – that envisages a "world-class global airline". Now, the programme appears to be taking longer than expected, with Chandrasekaran pointing to challenges like persistent supply chain disruptions, the need to build up its pool of technical and airline professionals, as well as "the need to overhaul legacy systems, culture and fleet". He states: "Rebuilding Air India is a long journey: fleet renewal, training, service transformation, network expansion. Every great airline in history was built over decades, not quarters."