Air India Annual Loss Hits Record USD 2.8 Billion in FY26; Singapore Airlines Profits Plunge Amid Iran War

Air India Group has recorded a record annual loss of SGD 3.56 billion (approximately USD 2.80 billion) for the 2025-26 fiscal year, according to financial disclosures from shareholder Singapore Airlines. The loss, the largest since the Tata Group’s takeover in 2022, highlights the severe operational strain caused by the ongoing Iran war and Pakistan’s continued ban on Indian carriers using its airspace. These geopolitical hurdles have forced the airline to reroute flights and suspend several key international services, including the Delhi-Chicago and Mumbai-New York routes.

Air India Losses Impact Singapore Airlines

Singapore Airlines, which holds a 25.1% stake in the merged Air India-Vistara entity, saw its own annual net profit drop by 57.4% to USD 1.18 billion. This decline was primarily attributed to the inclusion of Air India’s full-year losses and the absence of a one-off accounting gain from the previous year. KPMG, auditing the results, noted "indicators of impairment" regarding the investment, citing heightened uncertainty in the aviation sector. Alibaba Q4 Results: Cloud and AI Revenue Growth Accelerates Amid AI Boom; Overall Revenue Hits 243 Billion Yuan.

Despite the financial setback, Singapore Airlines reiterated its long-term commitment to the carrier. The group stated that its investment in Air India remains a core component of its multi-hub strategy, providing a direct stake in one of the world's fastest-growing aviation markets. It continues to work with Tata Sons on a multi-year transformation programme to modernise the fleet and improve service quality.

Operational Headwinds and Flight Curtailments

The airline’s financial health has been hampered by a combination of rising jet fuel prices and expensive flight paths necessitated by regional conflict. Pakistan’s airspace closure has specifically impacted non-stop services to North America and Europe, requiring longer flying times and higher fuel consumption. Consequently, Air India has announced temporary reductions in flight frequencies to Paris, Milan, and Rome through August 2026.

These operational difficulties have also impacted the airline's competitive standing. While Air India scales back, foreign competitors such as Lufthansa and Cathay Pacific have increased their capacity to India. Data shows that foreign carriers’ share of international flights from India rose to over 58% recently, as passengers increasingly seek reliable alternatives for long-haul travel amidst the current disruptions.

Safety Scrutiny and Leadership Transition

In addition to financial losses, Air India continues to face intense regulatory scrutiny following a fatal Dreamliner crash in Gujarat last year that resulted in 260 deaths. The tragedy prompted a deeper involvement from Singapore Airlines, which has reportedly moved its own engineering and maintenance teams into Air India’s operations to bolster safety protocols and operational standards. SpaceX IPO Governance Concerns: New York, California Pension Leaders Urge Elon Musk To Scrap Extreme Control Structures.

The airline is also undergoing a leadership transition following the resignation of CEO Campbell Wilson in April. Reports suggest that potential successors include Singapore Airlines executive Vinod Kannan. Until a permanent replacement is found, the airline’s management remains focused on navigating the current geopolitical crisis and stabilizing the network to reduce last-minute cancellations for passengers.

(The above story first appeared on LatestLY on May 15, 2026 08:05 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).