Air India Faces Growing Crisis as Ahmedabad Crash Report Release Nears
Air India is confronting a deepening crisis marked by a leadership vacuum and mounting financial losses as it struggles to recover from the crash of flight AI‑171. The final report on the crash, expected soon from India’s Aircraft Accident Investigation Bureau (AAIB), is anticipated to shed light on the tragedy that claimed 260 lives. Meanwhile, the airline faces multiple operational and financial challenges that threaten its turnaround plans.
Leadership and Financial Challenges
Last month, Air India’s chief executive officer, Campbell Wilson, resigned midterm amid reports that losses for the year ending March 2026 reached approximately $2.4 billion. This makes Air India the largest loss-making entity within the Tata Group, which acquired the airline from the government in 2022. The Tata board recently met to discuss cost-cutting measures and warned staff of difficult times ahead.
Singapore Airlines, which holds a 25.1% stake in Air India, has increased its involvement, with senior leadership visiting the Tata Group headquarters in Mumbai earlier this year. Aviation experts note that Wilson’s departure leaves a leadership void at a critical time when clear direction is needed to navigate the airline through ongoing difficulties.
Jitendra Bhargava, a former Air India executive director, highlighted that the airline’s five-year revamp plan has faced significant implementation gaps. He also pointed out that the Tata Group may have underestimated the challenges inherited from the legacy carrier, and that Wilson was unable to assemble a strong management team quickly enough.
Operational Issues and External Pressures
Air India has faced several operational setbacks over the past year. In one incident, a flight from Delhi to Vancouver had to return after nearly eight hours in the air due to lacking regulatory approval to enter Canadian airspace. Aviation experts described this as a serious procedural failure.
India’s aviation regulator found 51 safety violations at Air India during its annual audit, including seven high-level safety lapses. These issues have compounded concerns about the airline’s safety and operational standards.
Externally, Air India’s operating environment has worsened. The airline expected to add dozens of new aircraft to its fleet, but supply chain delays have disrupted these plans. Additionally, the number of routes has decreased since 2024, with key international services such as Delhi-Washington and Mumbai-San Francisco discontinued, likely impacting revenue.
The depreciation of the Indian rupee by over 10% against the US dollar has also posed a significant challenge. Since many costs, including fuel, are dollar-linked, this currency weakness has increased financial pressure on the airline.
Outlook and Potential Impact of the Ahmedabad Crash Report
Industry analysts suggest that the Tata Group and Singapore Airlines will need to provide additional financial support to manage the losses and stabilize Air India. The current losses are comparable to the financial challenges Tata faced during its acquisition of Corus Steel nearly two decades ago.
Some of the reported losses may relate to legacy issues such as refurbishment payments and penalties for returning older aircraft. However, ongoing factors like high fuel costs, currency depreciation, and route closures are expected to continue affecting the airline’s financial performance in the near term.
The recent conflict in the Middle East presented an opportunity for Air India to expand its international market share as Gulf carriers faced challenges. However, aircraft availability constraints have limited the airline’s ability to capitalize on this situation.
The upcoming AAIB report on the Ahmedabad crash will be closely watched. While financial liabilities related to the crash are expected to be largely covered, any negative findings could harm Air India’s reputation and require significant efforts to restore public confidence.
