Air India and Air India Express, both owned by the Tata Group, have reported a huge combined loss before tax of ₹9,568.4 crore in FY 2025. This is a big setback at a time when the Tata Group has been investing heavily in reviving and modernizing the two airlines. The loss figures show the scale of challenges India’s national carrier and its low-cost arm face in a highly competitive aviation market.
Air India alone reported a loss before tax of ₹3,890.2 crore in FY 2025. Air India Express, which was earlier known for steady profits, recorded a much higher loss of ₹5,678.2 crore. This marks the first time the budget airline has slipped into such a deep financial crisis.
The contrast with rival airlines is striking. IndiGo, India’s largest airline by market share, posted a profit before tax of ₹7,587.5 crore in the same financial year. In comparison, other smaller players also reported losses: Akasa Air lost ₹1,983.4 crore, and SpiceJet reported a smaller loss of ₹58.1 crore.
Debt levels are another major concern. At the end of FY 2025, Air India carried a debt burden of ₹26,879.6 crore, while Air India Express had ₹617.5 crore in debt. In comparison, IndiGo’s debt stood at ₹67,088.4 crore, Akasa Air’s at ₹78.5 crore, and SpiceJet’s at ₹886 crore.
Several factors contributed to the heavy losses faced by both Air India and Air India Express.
High fuel prices added significant costs to operations. Fuel makes up nearly 40% of an airline’s expenses, and any increase affects profits quickly.
Currency fluctuations further increased operating costs, especially since many expenses such as aircraft leasing and maintenance are paid in dollars.
The airlines also faced high expenses related to fleet expansion and integration, as Tata Group pushed ahead with its ambitious modernization plans.
At the same time, competition in the Indian aviation market remains fierce, with IndiGo holding a dominant position and newer players like Akasa pushing fares lower.
Even though passenger traffic in India grew strongly during FY 2025, the rising costs outpaced revenues, squeezing margins and creating losses.
To reduce inefficiencies and strengthen operations, Tata Group has undertaken major consolidation moves.
The Air India–Vistara merger was completed in November 2024. This created a stronger full-service airline under the Air India brand.
The Air India Express and AIX Connect merger was completed in October 2024. This unified the budget airline operations into a single entity under the Air India Express brand.
These mergers are aimed at simplifying the structure of Tata’s airline business, achieving economies of scale, and improving overall efficiency.
Air India is in the middle of one of the largest aircraft expansion programs in aviation history. In February 2023, it placed an order for 470 new aircraft—250 from Airbus and 220 from Boeing. Deliveries of these aircraft are scheduled through 2025 and beyond.
In addition, Air India announced a $400 million refurbishment program for 67 existing aircraft. This covers 27 A320neo planes and 40 wide-body aircraft. The goal is to upgrade the interiors, improve passenger comfort, and match global standards.
Air India Express is also receiving new planes, especially Boeing 737 MAX aircraft. Deliveries of 50 aircraft redirected from Boeing are expected to be completed by April 2025. This will allow the budget carrier to expand its domestic and regional international network.
Both airlines are also working hard on improving service quality and brand image.
Air India has introduced free inflight Wi-Fi on its Airbus A350s, Boeing 787-9s, and some A321neo aircraft from January 2025. This makes it the first Indian airline to offer this service.
Air India launched a complete rebranding initiative, with a new livery and a refreshed logo under the “Vista” identity.
Air India Express also unveiled a modern brand identity in October 2023. Along with this, it launched new products such as “Xpress Lite” fares and focused on ancillary revenue streams like hot meals, extra baggage, and priority boarding. The goal is to generate at least 20% of revenues from ancillary services.
Air India is preparing to launch a dedicated cargo subsidiary as part of its growth strategy. The airline aims to scale up cargo operations to handle 2.5 million tonnes by 2027. It also plans to use advanced revenue-management systems to improve cargo earnings.
This is expected to provide a steady revenue stream that is less dependent on passenger traffic, helping balance the volatility in airline profits.
The way forward for Air India and Air India Express will depend on how well the Tata Group can execute its long-term transformation plan, called Vihaan.AI. Here are the main focus areas:
The airlines must cut costs and achieve efficiencies from the recent mergers. Sharing resources, optimizing crew schedules, and standardizing fleets will reduce expenses.
Air India needs to focus on profitable long-haul and business travel routes, while Air India Express can target leisure travelers and tier-II and tier-III cities. Route rationalization will be key.
With ticket prices under constant pressure, building strong streams of extra income from meals, baggage, and add-on services is essential for both carriers.
The cargo subsidiary could become a reliable buffer against the ups and downs of passenger revenues, provided it scales quickly and efficiently.
Better service, modern cabins, free Wi-Fi, and strong branding will help rebuild customer loyalty, which has suffered in the past.
The ₹26,879.6 crore debt at Air India remains a heavy burden. Careful financial planning, rational borrowing, and possible asset monetization will be needed to manage this responsibly.
IndiGo’s record ₹7,587.5 crore profit in FY 2025 shows the strength of its model. To compete, Air India and Air India Express must leverage their scale, modern fleet, and Tata’s financial backing.
The loss of ₹9,568.4 crore in FY 2025 shows that Air India and Air India Express are still far from a financial turnaround. But the Tata Group’s strategy of consolidation, massive fleet renewal, service upgrades, and expansion into cargo indicates a clear long-term vision.
The coming years will be crucial. If costs are controlled, service quality is improved, and mergers deliver real efficiencies, the airlines could finally begin to challenge IndiGo’s dominance. However, the journey will take time, and the focus must remain on discipline, execution, and customer satisfaction.
The Tata Group has bet big on aviation. The next phase will decide whether Air India and Air India Express can move from heavy losses toward becoming a world-class airline group.