Tata Group’s Air India to Face Record $1.6 Billion Loss After Ahmedabad Crash

Tata Group backed Air India Ltd. is on track to report an annual loss of at least ₹15,000 crore ($1.6 billion) for the year ending March 31, according to Bloomberg reports.  

The projected loss would reverse recent progress towards stabilising the airline’s finances and operations. 

Crash and Airspace Restrictions Increase Costs 

The financial impact follows a fatal Dreamliner crash in June that killed more than 240 people and disrupted flight schedules.  

Operating costs also rose after Pakistan closed its airspace to Indian carriers following a military clash, forcing longer routes to Europe and the United States and increasing fuel and crew expenses. 

Turnaround Targets Delayed 

Before the crash, Air India had been moving towards operational break-even in the current financial year. That target is no longer expected to be met.  

Management submitted a 5-year business plan that projected profitability only in the third year, but the board rejected the proposal and asked for a more aggressive recovery plan. 

Industry Disruptions in Focus 

The losses come during a turbulent period for Indian aviation, with passenger anxiety, delays and mass cancellations by a rival carrier.  

These events have drawn attention to the concentrated structure of the domestic airline market and operational reliability across the sector. 

Cumulative Losses and Funding Support 

Government filings compiled by business intelligence platform Tofler show Air India recorded losses of ₹32,210 crore over the past 3 years. The airline sought at least ₹10,000 crore in fresh financial support last year, according to Bloomberg reports. 

Ownership and Management Developments 

Air India is jointly owned by Tata Group and Singapore Airlines, which holds a 25.1% stake after the merger of Vistara with Air India in 2024.  

Tata Group has begun scouting for a new chief executive officer to replace Campbell Wilson, although the process may depend on the release of the crash investigation report.  

Singapore Airlines’ earnings have also been affected by Air India’s performance, while supporting restructuring measures, including bringing aircraft maintenance operations in-house. 

Read More:  Tata Group’s Air India Eyes for New CEO to Replace Campbell Wilson!  

Conclusion 

Air India’s turnaround has been delayed by the crash, geopolitical disruptions and operational pressures, with profitability now expected to take longer than previously planned. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.