Air India has reported a wider-than-expected annual loss of over Rs 22,000 crore ($2.4 billion) for the fiscal year ended March 31, according to a Bloomberg report citing sources. The loss significantly exceeds the airline’s earlier internal estimate of about $1.6 billion flagged in January, forcing the company to ask for funds from its key shareholders, the Bloomberg report added.
Financialexpress.com could not independently verify this news. We reached out to Air India, and they declined to comment.
Shareholders weigh capital infusion
According to Tracxn data, Air India reported a loss of Rs 10,858.83 crore in FY25. The airline is now in discussions with its key shareholders, the Tata Group and Singapore Airlines, for a potential capital infusion. Singapore Airlines holds a 25.1% stake in Air India following the 2024 merger with Vistara, Bloomber report said.
While talks are ongoing, the size of the proposed funding remains uncertain and may fall short of the airline’s requirements, potentially forcing Air India to explore additional financing avenues. Tata Group and Air India did not respond to Bloomberg’s queries, while Singapore Airlines declined to comment.
Leadership churn and regulatory pressure
Chief Executive Officer Campbell Wilson recently announced plans to step down later this year. At the same time, the airline has faced regulatory scrutiny, ranking poorly in the aviation watchdog’s latest safety audit.
Separately, stemming Air India’s losses has reportedly been set as a key condition for approving a third term for Tata Group Chairman Natarajan Chandrasekaran, the Bloomberg report said.
Operational setbacks derail turnaround
The fiscal year began on a positive note, with Air India posting operating profits in early April 2025. However, a series of disruptions quickly reversed momentum.
The closure of Pakistani airspace following a brief conflict in May forced Indian carriers to take longer routes to the US and Europe. This was followed by a fatal crash involving a Boeing 787 Dreamliner in June that killed 241 people onboard, leading to the airline scaling back both international and domestic operations, the Bloomberg report added.
Geopolitics, fuel costs weigh on margins
Another reason why Air India suffered losses is that the Middle East, which accounts for roughly 16% of its capacity, has seen widespread disruption due to ongoing conflict. This forced the airline to ground several routes and take up costly detours on long-haul flights.
At the same time, elevated jet fuel prices and policy headwinds, including tariff actions under Donald Trump and tighter visa regimes, have added pressure on margins, Bloomberg noted.
Spillover impact on partners
The Bloomberg report added that the airline’s deteriorating performance has also weighed on Singapore Airlines, which has seen its earnings impacted following its deeper integration with Air India post the Vistara merger.