Air India posted a $2.8 billion loss for the financial year 2025-2026, a Reuters report said, quoting  Singapore Airlines’ annual report. This is seen as a direct impact on the company – India’s second-largest airline, grappling with disruption from the Iran war and Pakistan’s ban on Indian carriers from its airspace. 

Air India hasn’t yet publicly released its FY26 financial statements. That said, this would be Air India’s biggest loss since it was bought by the Tata Group in 2022. 

Singapore Airlines holds 25% in Air India

According to a Reuters report, Singapore Airlines, which owns a 25% stake in ​Air India, said the ⁠Indian group’s losses amounted to 3.56 billion Singapore dollars for the 12 months to end-March. This converts to $2.80 billion at current ‌exchange rate. Readers must remember that Singapore Airlines did not indicate the exchange rate it had used to calculate the loss. 

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According to Singapore Airlines’ annual report, “net profit declined due to the absence of a prior year one-off accounting gain, coupled with the share of full-year losses from Air India.”

Singapore Airlines’ net profit declines in 2025-2026

The statement elaborated that the Singapore Airlines Group’s net profit declined by $1,594 million, down 57.4% to $1,184 million in 2025-2026. According to the Group,this is, primarily due to the absence of the $1,098 million non-cash accounting gain recognised in November 2024 upon the completion of the Air India-Vistara merger. 

The swing from a share of profits of associated companies last year to a loss this year (-$846 million) was due to the Group accounting for its share of Air India’s full-year losses, versus only four months the previous year. Singapore Airlines is committed to its 25.1% investment in the Air India Group, which is a core component of its long-term multi-hub strategy. 

Air India facing financial headwinds

Air India is facing financial headwinds due to airspace curbs and a surge in jet fuel prices that have forced the carrier to curtail international flights.

“Air India faces headwinds such as industry-wide supply chain constraints, airspace restrictions, constraints on operations to its key Middle East markets, and elevated jet fuel prices,”  Singapore Airlines said in a statement.

Air India cuts flights

On Wednesday, Air India announced it would cut nearly 100 overseas flights and temporarily suspend services on seven routes, including Delhi-Chicago, that will result in up to 27 percent reduction in the loss-making airline’s international capacity as it grapples with mounting operational costs due to airspace curbs and high jet fuel prices. 

According to the company, the airline will continue to operate more than 1,200 international flights every month. These include 33 flights per week to North America, 47 flights per week to Europe, 57 flights per week to the UK, eight flights per week to Australia, 158 flights per week to the Far East, Southeast Asia, and SAARC regions, and seven flights per week to Mauritius 

Air India overhaul plans 

SIA said Air India continues to make progress in its fleet renewal and aircraft retrofit program, as well as in initiatives to elevate the end-to-end customer experience and improve operational performance.

“SIA is working closely with its partner Tata Sons to support Air India’s multi-year transformation program,” Singapore Airlines said in a statement. 

Air India undergoing upgrades

Air India is carrying out a widebody modernisation programme. The upgrade is part of a broader plan to revamp Air India’s legacy fleet with new interiors and branding. Over the next two years, all 26 Boeing 787-8 aircraft will be retrofitted with a three-class configuration comprising Business, Premium Economy, and Economy cabins.  

On the narrowbody side, the airline is upgrading 27 older Airbus A320neo aircraft and has begun refurbishing the cabins of ex-Vistara A320-family aircraft to harmonize product offerings post-merger. 

Middle East a key headwind for aviation industry

However, Singapore Airlines’ statement highlighted that “heightened geopolitical tensions, including the conflict in the Middle East, are a major headwind for the airline industry.”

It highlighted that “the most immediate impact is on jet fuel prices, which have more than doubled since the conflict began, adding significant cost pressure for airlines. As the Group’s fuel bills are typically priced on a lagged basis, the impact is only partially reflected in March 2026. The full impact is expected to feed through in FY2026/27.”

 While SIA and Scoot have raised air fares across their network, “the adjustments do not fully offset the rise in the price of jet fuel, which is the Group’s single-largest expenditure item. Depending on the duration and how the situation in the Middle East develops, there could be broader implications for supply chains and macroeconomic conditions affecting demand patterns,” Singapore Airlines highlighted.