Air India Faces Deepening Financial Crisis Before Ahmedabad Crash Report Release
Air India is grappling with a profound crisis, marked by substantial financial losses and a leadership void, as the release of the final report into the 12 June 2025 Ahmedabad crash approaches. The incident, which claimed 260 lives, saw London-bound flight AI-171 crash moments after take-off.
The airline's chief executive, Campbell Wilson, resigned last month, coinciding with reported losses reaching $2.4 billion for the year ending March 2026. This places Air India as the largest loss-making entity within the Tata Group, which acquired the carrier in 2022.
Operational Failures and External Pressures
Operational shortcomings continue to plague Air India. In March, a Delhi-Vancouver flight was forced to return after eight hours due to lacking Canadian airspace approval, a lapse deemed "highly unusual" by aviation consultancy Acumen Aviation. Last year, India's aviation regulator also identified 51 safety violations during its annual audit, with seven categorised as high-level.
External factors exacerbate these internal issues. Supply chain disruptions have delayed new aircraft deliveries, while key routes, such as Delhi-Washington and Mumbai-San Francisco, have been cut since 2024, impacting revenue. The Indian rupee's depreciation by over 10% against the US dollar has further burdened costs, particularly for fuel, which is dollar-denominated.
Future Outlook and Crash Report Impact
Aviation analysts, including Mahantesh Sabarad, suggest that Tata and Singapore Airlines, a 25.1% shareholder, will need to inject further capital to cover mounting losses. Sabarad compared the challenge to Tata Steel's acquisition of Corus Steel. While financial liabilities from the Ahmedabad crash are largely expected to be covered, any negative findings in the upcoming investigation could severely damage Air India's already fragile reputation.
