Air India seeks funds from shareholders after ₹22,000cr loss
What's the story
Air India has reported a massive annual loss of over ₹22,000 crore ($2.4 billion). The figure is much higher than the internal estimate of $1.6 billion reported by Bloomberg in January. The fiscal year ending March 31 witnessed several challenges for the airline, including a deadly Boeing 787 Dreamliner crash and the closure of Pakistani airspace to Indian carriers following a brief conflict in May 2025.
Funding discussions
Tata Group, Singapore Airlines in talks
In light of the staggering loss, Air India is seeking financial support from its shareholders. The company's major shareholder, Tata Group, and Singapore Airlines, which holds a 25.1% stake in the airline, are in talks for an infusion of funds. However, the amount being discussed may be less than what Air India actually needs. This could force the airline to explore other financing options as well.
Operational hurdles
Staggering losses pose challenges for Air India's leadership
The record loss comes at a crucial time for Air India. CEO Campbell Wilson announced his plan to step down later this year. The airline was rated worst for safety issues in the aviation regulator's latest annual audit. Despite ambitious fleet expansion plans, it has struggled to improve service standards and yields as desired. Stemming the losses is also one of the key conditions for approving a third term for Tata Group Chairman Natarajan Chandrasekaran.
Profit struggles
Closure of Pakistan airspace and Boeing crash affect operations
Air India started the fiscal year on a positive note with operating profits in early April 2025. However, things took a turn after Pakistan closed its airspace to Indian airlines. This forced them into certain longer routes to the US and Europe. A deadly June crash of a Boeing Dreamliner, which killed over 240 people, also affected the carrier's operations, forcing it to cut international and domestic services.
External challenges
Impact of Trump's tariffs and Middle East conflict
US President Donald Trump's tariffs on India and a crackdown on foreign worker visas impacted the carrier's bottom line. The ongoing conflict in the Middle East has also hit Air India hard, as it is one of the foreign carriers most affected by this crisis. The region accounts for 16% of its total capacity and is now largely grounded.