Tata Group-owned Air India has posted a staggering annual loss of around 2.8 billion US dollars for the 2025–26 financial year, underscoring the scale of the challenge facing the carrier’s high-profile turnaround plan. The loss figure, equivalent to 3.56 billion Singapore dollars, was disclosed by Singapore Airlines (SIA), which holds a 25 per cent stake in Air India, in its latest annual report. The deficit marks Air India’s biggest annual loss since it was taken over by the Tata Group from the Indian government in 2022. It also represents one of the deepest losses recorded by any major Asian carrier in recent years, coming at a time when global air travel demand has largely recovered from the pandemic.

The deficit marks Air India’s biggest annual loss since it was taken over by the Tata Group from the Indian government in 2022. It also represents one of the deepest losses recorded by any major Asian carrier in recent years, coming at a time when global air travel demand has largely recovered from the pandemic.

According to SIA’s filing, Air India Group – which includes the full-service airline and its low-cost operations – reported losses of SG$3.56 billion in the year ended March 31, 2026, translating to roughly 2.8 billion US dollars at prevailing exchange rates. The disclosure came through SIA’s share of Air India’s results, as the Singaporean carrier booked a steep hit to its own earnings from its investment in the Indian airline.

Operational headwinds have played a significant role in the mounting losses. Reports cite a combination of geopolitical disruptions, including airspace closures linked to tensions in the Middle East and the continued closure of Pakistani airspace to Indian carriers, which have forced Air India to operate longer, costlier routes on several international sectors. At the same time, record-high jet fuel prices and a strong US dollar have further squeezed margins, particularly on long-haul flights.

In response to these pressures, Air India has begun temporarily reducing or suspending a number of international services, with some cuts to remain in place until at least August 2026. The airline has said the changes are intended to improve network stability and reduce last-minute disruptions for passengers while it recalibrates capacity on unprofitable routes.

The heavy loss comes in the middle of one of the aviation industry’s most ambitious transformation programs. Since assuming control in 2022, Tata Group has launched a multi-year plan to rebuild Air India as a world-class global carrier, placing massive aircraft orders, merging Vistara into Air India, upgrading cabins and inflight services, and overhauling technology and operations. Analysts note that such large-scale restructuring often depresses profitability in the short term as integration costs, fleet renewal expenses and one-off charges accumulate before efficiency gains materialise.

Singapore Airlines has stressed that despite the near-term drag on its own earnings, it remains committed to the long-term potential of the Indian market and its partnership with Tata in Air India. However, KPMG, in an accompanying audit report, flagged “indicators of impairment” linked to SIA’s investment, citing the difficult operating environment and ongoing geopolitical uncertainties.

For now, Air India remains unlisted and has not publicly filed detailed financial statements in India, leaving the SIA disclosures and subsequent media reports as the main window into its financial health.

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