Air India posted a record loss of $2.4 billion for the fiscal year ending March 2026 which is nearly 50% worse than the airline’s own internal estimate. Tata Group and Singapore Airlines are currently in talks to inject fresh capital. Singapore Airlines has seconded two senior executives directly into Air India’s operations. Here is everything that happened, and what it means for Indian aviation.
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When Tata Group acquired Air India from the Indian government a few years back in 2021, it was considered as one of aviation’s most ambitious turnarounds. But five years later, the numbers tell a harder story.
Air India lost more than ₹22,000 crore, which is roughly around $2.4 billion, in the fiscal year ending March 2026. This is far worse than the $1.6 billion loss the airline had privately estimated merely a months earlier. The scale of the damage has sadly forced the airline back to its owners for money and Singapore Airlines, which holds around 25.1% stake in the carrier, has moved from being just a commercial partner to something closer to a literal operational lifeline.
How the Air India Crisis Unfolded
Contrary to what many believe, the losses didn’t accumulate gradually. Because Air India had started FY2026 on quite a positive note, turning operating profits in early April 2025. What followed was a cascade of shocks: Pakistan shut its airspace during a brief military standoff immediately in May, forcing expensive rerouting of long-haul flights to the US and Europe. June was the worst month for the Airline, a Dreamliner crash killed more than 240 people, leading to significant flight reductions. Then following this, West Asia conflict added further strain, disrupting a region that accounts for 16% of Air India’s total capacity. And then elevated jet fuel prices compounded the damage, while US President Donald Trump’s tariffs on India and tighter visa restrictions squeezed demand on transatlantic routes.
To top it all off, technical reliability also became a concern. A company document submitted to the Indian government in February 2026 showed that technical incidents which including engine oil and fuel leaks had reached their highest recorded rate in at least 14 months in January 2026. The airline recorded 1.09 technical incidents per 1,000 flights, which is up from 0.26 per 1,000 flights in December 2024.
To contain costs, Air India plans to cancel 27% of its international flights. And nearly 150 weekly services, between June and August 2026, citing the need to “improve network stability and reduce last-minute inconvenience to passengers.”
Singapore Airlines Steps In
For Singapore Airlines, the Air India losses are painful yes, but not paralyzing. Singapore Airlines Group reported that Air India was largely responsible for a whopping 57.4% year-on-year drop in net profit to SGD 1.2 billion, even though it was posting record annual revenues of SGD 20.5 billion.
Despite the financial hit caused, Singapore Airlines has not wavered. CEO Goh Choon Phong publicly reaffirmed the carrier’s commitment to Air India’s transformation and to add to that, they backed that commitment with people, not just capital. Singapore Airlines has seconded Basil Kwauk as Chief Operations Officer and Jeremy Yew as Engineering and Maintenance Head directly into Air India’s leadership team. This kind of influence goes well beyond a typical minority shareholder relationship. It’s safe to assume, Singapore Airlines is now actively managing Air India’s two most troubled operational areas.
Along with this, on the commercial side, Air India has expanded its codeshare with Singapore Airlines in June 2026, placing AI-coded flight numbers on all Singapore Airlines services between Singapore and India. These are covering Ahmedabad, Bangalore, Delhi, Hyderabad, Kochi, Kolkata, and Mumbai. The combined network now spans 61 destinations across 20 countries.
The Stakes for Indian Aviation
The stakes now extend beyond the airline itself. Bloomberg has reported that controlling Air India’s losses is one of the conditions tied to approving a third term for Tata Group Chairman Natarajan Chandrasekaran.
For Singapore Airlines, absorbing the losses now is a calculated long-term bet. India is projected to become the third-largest aviation market in the world within this decade. Aviation analysts describe Singapore Airlines’ decision to stay the course as “a masterclass in patience”. Quietly but surely, securing its foothold in the world’s fastest-growing aviation market by absorbing short-term pain.
The turnaround was always going to be a multi-year effort. Air India had inherited the ageing aircraft, weak operational infrastructure, and a workforce culture shaped by decades of government ownership. Tata Group knew this very well going in, and Singapore Airlines knew it too when it merged Vistara into Air India in 2024, and taking its 25.1% stake in the combined carrier.
What nobody fully anticipated was a Dreamliner crash, two simultaneous airspace closures, a regional war, and a tariff shock, literally all in the same fiscal year.
The question now isn’t whether Air India will survive. With Tata Group’s backing and Singapore Airlines’ operational and capital support, ‘survival’ is not seriously in question. The question is how long the transformation takes, and the bigger question- how much it costs the shareholders who are funding it.
Editorial Disclaimer: Financial figures and operational data in this article are sourced from Bloomberg, Outlook Business, ch-aviation, The Online Citizen, and Singapore Airlines’ official investor briefings. Cover Page Media has not independently verified all figures. Some financial data cited is based on reports from people familiar with the matter and has not been officially confirmed by Air India or Tata Group.
