Air India Posts Record ₹22,000 Cr Loss, Tata and Singapore Airlines in Talks for Bailout

It has been a brutal year for Air India. The Tata-owned carrier lost more than ₹22,000 crore, roughly $2.4 billion, in the fiscal year ending March 2026. That is far worse than the $1.6 billion loss the airline had privately estimated just months earlier.

The scale of the damage has now pushed Air India to go back to its owners with a request for money, Bloomberg reported.

Tata Group, which controls Air India and Singapore Airlines, which owns a 25.1% stake, are both in discussions to pump in fresh funds, according to the report. However, the amount being considered may not be enough to fully cover what the airline needs, meaning Air India may have to look for additional sources of financing as well.

The stakes are high for Tata Group beyond just the airline. The news agency had earlier reported in February that getting Air India's losses under control is one of the conditions tied to approving a third term for Tata Group Chairman Natarajan Chandrasekaran.

Singapore Airlines is also feeling the pain. The carrier, which entered Air India as a minority shareholder after merging its Indian affiliate Vistara with the airline in 2024, has seen its own earnings dragged down by Air India's poor showing.

What Went Wrong

The year started well enough. Air India was actually turning operating profits in the early weeks of April 2025. Then, one by one, things fell apart.

In May, India and Pakistan had a brief military standoff. Pakistan responded by shutting its airspace to Indian airlines, pushing Air India's long-haul flights to the US and Europe onto longer, more expensive detours. The extra flying time meant more fuel, more costs and thinner margins.

Then came June, the worst month of all. A Boeing 787 Dreamliner operated by Air India crashed, killing more than 240 people. The tragedy forced the airline to cut back both domestic and international flights at a time when it could least afford to.

The West Asia conflict made things worse still. Air India is more exposed to that region than most foreign carriers, it accounts for 16% of the airline's total capacity. With hostilities making much of that market unavailable, flights to Europe and North America were rerouted again, piling on costs at a time when jet fuel prices were already elevated.

Adding to all of this, US President Donald Trump's tariffs on India and tighter restrictions on foreign worker visas hit demand on key routes, further squeezing the airline's revenue.

The cumulative effect of all these blows meant Air India missed its own target of breaking even operationally by the end of the fiscal year.

The financial crisis is unfolding alongside a leadership vacuum. CEO Campbell Wilson announced last week that he plans to step down later this year, leaving the airline without a permanent head at a critical moment.

To make matters worse, Air India was ranked last on safety in the Directorate General of Civil Aviation's (DGCA) most recent annual audit, a damaging finding for a carrier that has spent heavily on expanding its fleet and has ambitious growth plans.