Air India clocks record annual loss of over $2 billion in threat to turnaround plans

Air India Group has recorded a record loss of more than $2 billion in fiscal 2026, according to shareholder Singapore Airlines’ annual report, at a time when India’s second-largest airline is grappling with disruptions due to the Iran war and Pakistan’s ban on Indian carriers in its airspace.

In the report published on Thursday, Singapore Airlines, which owns a 25% stake in Air India, said the Indian carrier’s loss for the financial year ended March 31 was 3.56 billion Singapore dollars, or $2.80 billion at current exchange rates.

Singapore Airlines did not specify the exchange rate it used to calculate the loss. Reuters had previously reported that Air India was expected to post an annual loss of over $2.12 billion.

The loss will be another major setback for Air India, which has been forced to cut several international flights in recent months, disrupting the Tata Group-owned airline’s turnaround plans.

In a report appended to SIA’s disclosures, its auditor KPMG said the company’s management saw “indicators of impairment” for its Air India investment, citing challenging operating conditions and increasing geopolitical uncertainty.

Air India, which is not listed in India and has not yet filed earnings with local regulators, declined to comment. While its standalone loss in 2024-25 was $415 million, when budget operator Air India Express was included, there was a consolidated loss of $1.13 billion.

“Air India faces headwinds such as industry-wide supply chain constraints, airspace restrictions, restrictions on operations in key Middle East markets and rising jet fuel prices,” SIA said in a statement, adding that it was committed to investing in the group.

Air India’s flight disruptions are a boon for foreign carriers, Reuters reported on Thursday; Lufthansa Group and Cathay Pacific are among those adding service to one of the world’s fastest-growing aviation markets.

Air India has also faced intense scrutiny since last year’s Dreamliner crash in Gujarat, India, which killed 260 people.

SIA warned that rising fuel costs due to the Iran war were still “percolating” and would have a more severe impact next year, as it reported a smaller-than-expected 57.4% drop in annual profit.