Air India posts record $2.79 billion annual loss, hits Singapore Airlines earnings

India’s flagship carrier Air India posted a record full-year loss of $2.79 billion (around Rs 26,798 crore) in 2025-26, dealing a major blow to shareholder Singapore Airlines and underscoring the severe operational and geopolitical challenges facing the Tata Group-owned airline.

The losses resulted in a $743 million hit to Singapore Airlines’ earnings during the first full year since the carrier acquired a 25.1 per cent stake in Air India following the merger of Vistara with Air India.

According to Singapore Airlines’ annual report released on Thursday, Air India Group recorded losses of 3.56 billion Singapore dollars for the 12 months ended March 2026, equivalent to about $2.79 billion at current exchange rates.

The disclosures reveal the scale of financial stress confronting Air India despite the Tata Group’s aggressive turnaround strategy, which includes fleet modernisation, network expansion and integration of its airline businesses.

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The steep losses also weighed heavily on Singapore Airlines’ overall profitability. The Singapore carrier reported a 57.4 per cent fall in full-year net profit to SGD 1.18 billion ($930 million), even as operating profit surged 39 per cent to a record SGD 2.4 billion ($1.89 billion).

The contrast highlighted how Air India’s losses dragged down Singapore Airlines’ bottom line despite robust core operational performance.

Singapore Airlines said Air India continued to face “headwinds such as industry-wide supply chain constraints, airspace restrictions, constraints on operations to its key West Asia markets, and elevated jet fuel prices”.

Air India has been grappling with multiple disruptions over the past year, including soaring fuel prices linked to the Iran conflict and Pakistan’s closure of airspace to Indian carriers, which forced airlines to operate longer and costlier routes.

The airline has also cut several international services in recent months as aircraft availability and operational pressures intensified.

In a report accompanying Singapore Airlines’ disclosures, auditor KPMG flagged “indicators of impairment” related to the Air India investment, citing challenging operating conditions and heightened geopolitical uncertainty.

Air India, which is not listed in India, has not yet filed its financial statements with local regulators. In 2024-25, the airline had reported a standalone loss of $415 million, while consolidated losses including budget carrier Air India Express stood at $1.13 billion.

Despite the losses, Singapore Airlines reiterated its commitment to the Indian carrier and the fast-growing Indian aviation market.

The results also come as Air India remains under scrutiny following last year’s Dreamliner crash in Gujarat that killed 260 people, intensifying pressure on the airline’s operational and safety overhaul efforts.

Air India’s capacity cuts have meanwhile benefited foreign airlines expanding in India. Carriers including Lufthansa Group and Cathay Pacific have increased services to India as demand continues to outpace available capacity.