Air India Heads for ₹15,000 Crore Loss in FY26 After Ahmedabad Crash

Air India is set to report a record annual loss of at least ₹15,000 crore for FY26, following the tragic Ahmedabad plane crash in June 2025 and ongoing regional airspace disruptions that have derailed its profitability plans. The accident, which claimed over 240 lives, not only caused operational chaos but also severely impacted the airline’s reputation and passenger confidence.

The national carrier had been showing signs of stabilisation under the Tata Group’s turnaround strategy, benefiting from fleet modernisation, network rationalisation, and tighter cost controls. However, the crash and subsequent disruptions forced the airline to ground aircraft and cancel flights, pushing profitability further out of reach and shelving Tata Sons’ earlier targets for breakeven in the current fiscal year.

Operational challenges were compounded by Pakistan’s closure of its airspace to Indian airlines following last year’s military confrontation. Air India and other carriers were forced to operate longer, costlier routes to Europe and North America, sharply increasing fuel and operational expenses and further straining the airline’s finances.

Also Read: German Chancellor Friedrich Merz Arrives in Ahmedabad for His First Official Visit to India

Government filings indicate that Air India has accumulated losses of ₹32,210 crore over the past three years, and the airline had sought ₹10,000 crore in fresh financial support as part of its restructuring efforts. A five-year business plan projecting profitability by FY28 was rejected by the board, which demanded a more aggressive turnaround roadmap to restore investor confidence.

The mounting losses have prompted Tata Group to begin searching for a new CEO to replace Campbell Wilson, though a leadership change is expected only after the official crash investigation report is released. Singapore Airlines, holding a 25.1% stake post-merger with Vistara in 2024, continues to support restructuring efforts, including bringing aircraft maintenance operations in-house, despite being affected by Air India’s weak performance.

The record losses underscore the fragile state of Indian aviation, highlighting the challenges of operational recovery, financial stability, and restoring passenger trust in the aftermath of a major crash, as Air India battles both legacy debts and unprecedented crises in FY26.

Also Read: “Enchanting and Inspirational”: PM Modi Praises 14th Ahmedabad Flower Show