Air India Ltd. is set to report a record annual loss after last year's deadly crash and airspace shutdowns wiped out progress toward a turnaround, according to people familiar with the matter.
The carrier, which is a joint venture between the Tata Group and Singapore Airlines Ltd., is on track to post a loss of at least 150 billion rupees ($1.6 billion) for the year ending March 31, said the people, who asked not to be identified discussing private information. Earnings were further hit by Pakistan's closure of its airspace for Indian airlines following a military clash with India, forcing carriers to fly longer routes at higher costs to Europe and the US, they added.
The reversal is especially stark because Air India had been edging back toward profitability before the June Dreamliner crash - which killed more than 240 people - undid years of progress. The founders had targeted operational break-even this fiscal year, but profitability is now out of reach, the people said.
The losses come on the back of a turbulent year for Indian aviation marked by flier anxiety, flight delays and mass cancellations by a rival carrier that has put a spotlight on the duopolistic market structure.
Spokespersons for Air India, Tata Group and Singapore Airlines did not respond to emailed request for comments on the losses.
A new five-year plan submitted by management projected profits only in its third year, but it was rejected by the board, which has asked for a more aggressive turnaround push, the people said.
Government filings compiled by business intelligence platform Tofler show Air India has lost 322.1 billion rupees over the past three years. The airline sought at least 100 billion rupees in fresh support last year, Bloomberg News reported in October.
The mounting losses are now a concern for both owners. Tata Group has begun scouting for a new Chief Executive Officer to replace Campbell Wilson, though the search may not conclude until the crash report is released.
Singapore Airlines Ltd., which took a 25.1% stake after merging Vistara with Air India in 2024, has seen its own earnings dragged down by the carrier's performance even as it helps Air India bring aircraft maintenance in-house as part of a restructuring plan.
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