Air India Reports Massive Loss

Air India’s troubles are continuing with the airline Group, owned by the Tata Group, posting a massive loss.

For FY25, Air India and its budget business of the Express division saw a combined net loss exceeding USD $1 billion, specifically at USD $1.15 billion.

The substantial loss was spread across the two divisions, but primarily resulted from losses incurred at Air India Express following the integration of AirAsia India, amounting to USD $681 million.

For Air India, while some reasons can be identified that have caused the negative result, it showcases the challenges undertaken by the Tata Group since taking on Air India in 2022 to turn around the business.

While a legacy carrier, the sheer amount of investment required to make the airline profitable and a success is immense, and was not going to be an overnight task indeed; additionally, many obstacles have arisen preventing a smooth turnaround from occurring.

Air India has faced intense competition from other Indian carriers, notably from IndiGo, in the domestic market, as this airline has looked to aggressively expand and steal further market share from the long-established flag-carrier.

However, IndiGo wouldn’t be the only threat, with emerging Akasa Air also presenting concerns on a domestic front as this business grows aggressively with a fleet of Boeing 737 MAX jets, having only recently introduced them.

Away from this, Air India hasn’t been able to turn the demand around the world for its services into a profitable one, its image still being affected for a host of reasons.

All in all, Air India would consider itself to be positioned in a transition period. Still, that transition is arguably going slower than imagined, with many endeavours currently in the works.

From upcoming consolidation efforts to the transition towards next-generation fleet types, it has not been smooth sailing by any means, and the investment is yet to show its return truly. Still, as the airline executives argue, the foundations are being built.

What’s Been Happening At Air India?

It has been a challenging last six months for Air India, stemming from a fatal accident involving one of its Boeing 787 Dreamliners, but there has been further investigation and oversight.

India’s aviation watchdog, which has been keeping a close eye on the flag-carrier following a fatal 787 accident, has conducted audits into the business.

As part of an audit that occurred in July, and the findings across the government reported by Reuters, there were many safety lapses.

The report indicates there were a total of 51 safety lapses across Air India, which included several key safety measures that were not executed. Of the 51 safety lapses that were identified, they range from the usage of unapproved simulators to poor rostering systems for employees.

Additionally, there were concerns surrounding the lack of adequate training for some pilots, too. Ten inspectors from the Directorate General of Civil Aviation and four others carried out this 11-page confidential audit shared by Reuters.

As part of this, the auditors said they found recurrent training gaps for unspecific Boeing 787 and 777 pilots, with the failure to complete monitoring duties.

Seven “Level 1” breaches of significant nature needed to be fixed by July 30. Additionally, 44 others were determined as non-compliant and need to be resolved by the mid-to-late stages of August.

Hurdles With The Boeing 787

Meanwhile, Air India is facing aircraft shortages, which are driven by the Boeing 787, necessitating changes to the international network.

The Indian flag-carrier confirmed it’d suspend flying between New Delhi and Washington D.C. from September to maintain its schedule.

A move to axe this flight follows Air India’s current reconfiguration of 26 of its legacy 787-8 aircraft. This process has just begun, and is expected to continue for at least the following year if timelines can be stuck to.

Because of this move to reconfigure the planes, a decision with the future in mind, the flag-carrier will ultimately find itself short on capacity.