Air India's mounting losses weigh on Tata Sons chairman Chandra's tenure

Air India Group has accumulated losses of about Rs 47,821 crore since its takeover, leaving its prolonged transformation among the biggest unfinished projects of Chandrasekaran's tenure

Since the Tata Group took control of the embattled Air India Group in January 2022, the airline has accumulated a combined loss of about Rs 47,821 crore, turning what was billed as one of the country’s most ambitious corporate turnarounds into one of the biggest unfinished projects of N Chandrasekaran’s tenure as Tata Sons chairman. 

 

On Wednesday, Chandrasekaran said he would not seek another term as chairman of Tata Sons when his current tenure ends in February 2027. The decision came after months of uncertainty over his reappointment after concerns were raised by Tata Trusts about the performance of some group firms, including Air India. 

 

When Tata took over Air India in January 2022, it inherited an airline with ageing aircraft, grounded planes, outdated technology and years of accumulated organisational problems. The answer was an aggressive rebuild, including an order for hundreds of aircraft. In September 2022, eight months after the takeover, Air India unveiled “Vihaan.AI”, a five-year transformation plan that sought to expand its international network and put the airline on a path to “sustained growth, profitability and market leadership”. Understandably, a path to profitability was envisaged after 2027.

 

However, four years later, the timeline has stretched considerably. Last month, Chandrasekaran said Air India’s turnaround could take five to ten years, admitting that the transformation had been held back by supply-chain disruptions, legacy systems and processes, fleet renewal, organisational culture and the need to build technical talent. The path to profitability was now being envisaged after 2032. 

 

There have been other problems too, especially the global aircraft supply-chain crisis. Shortages of engines and components and delays at Boeing and Airbus meant that new planes did not arrive as quickly as planned. Moreover, the supply-chain crisis also affected plans to retrofit Air India’s old planes. 

 

Besides, there have been recurring challenges on the operational side, which continued to erupt even after the ownership change. In April 2023, the Directorate General of Civil Aviation (DGCA) issued show-cause notices to Chief Executive Officer Campbell Wilson and the head of flight safety over the airline’s handling of a February cockpit-breach incident involving a pilot who had allowed a friend into the cockpit. The DGCA subsequently fined Air India Rs 30 lakh and suspended the pilot’s licence for three months. 

 

In January 2024, DGCA imposed a Rs 1.10-crore penalty over safety violations on certain long-range, terrain-critical routes. Two months later, it imposed another penalty of Rs 80 lakh for violations of flight-duty-time limitations and fatigue-management requirements for pilots, including deficiencies in weekly rest and rest before and after ultra-long-haul flights. 

 

Passenger handling, too, became a regulatory issue. In May 2024, DGCA issued a show-cause notice after long delays on international flights, including a Delhi-San Francisco flight, when passengers were made to remain inside an aircraft without adequate cooling. The regulator said Air India was “time and again failing in taking due care of passengers”. 

 

At the same time, the Tata group was pushing ahead with the consolidation of its airline portfolio. Vistara was merged into Air India in November 2024, while AIX Connect (formerly AirAsia India) was merged into Air India Express a little later. Air India Group now consists of full-service carrier Air India and its subsidiary, the low-cost carrier Air India Express. 

 

The Air India-Vistara merger brought together different fleets, operating systems, employee structures and organisational cultures. In November 2024, Chandrasekaran said that such mergers “take time to play out”, adding that different parts of the business were at different points of maturity and would take time to fully align. 

 

However, just as the group was attempting to stabilise the enlarged airline, geopolitical disruptions hit its international operations. Pakistan’s closure of its airspace to Indian carriers after the Pahalgam terror attack in April 2025 forced Air India’s westbound flights to take longer routes, with some ultra-long-haul services requiring technical stops for refuelling or crew changes. That increased flying time, fuel consumption and operating costs and hurt an airline whose strategy depended heavily on expanding long-haul non-stop connectivity to Europe and North America. 

 

Then came the June 12, 2025, AI-171 crash, the most serious setback of the Tata-era turnaround. The Boeing 787-8 flying from Ahmedabad to London Gatwick crashed shortly after take-off, killing 260 people. The crash brought intense scrutiny of the regulator. The DGCA warned Air India over repeated crew-rostering lapses, ordered three officials to be removed from crew-scheduling and rostering roles and initiated disciplinary action. 

 

A month later, in July 2025, the regulator issued four show-cause notices covering 29 violations over a one-year period, involving inadequate cabin crew, duty and rest violations, training lapses and operational-procedure violations. 

 

After the crash, the airline was again forced to curtail its international operations to get its act together. However, its operational problems continued. In November 2025, an Air India Airbus A320 operated eight commercial flights after being released for service with an expired Airworthiness Review Certificate (ARC). The certificate had expired while the aircraft was undergoing an engine change, but the aircraft was released back into service after the work without the lapse being detected. DGCA grounded the aircraft, de-rostered the personnel involved and later imposed a Rs 1-crore penalty on the airline. 

 

There was no respite at the beginning of this year, either. Israel and the US attacked Iran on February 26 this year, sending a sizable part of the Gulf region into turmoil and forcing Air India to curtail its international operations once again as it relied on the airspace to reach Europe and North America. Higher fuel prices and a weakening rupee ballooned the airline’s costs. 

 

Meanwhile, its leadership remains in flux. In April, Air India confirmed that CEO Campbell Wilson had informed Chandrasekaran back in 2024 of his plan to step down in 2026 — a year before his term was to end. Earlier this month, Air India announced that Tewolde Gebremariam, the former chief executive of Ethiopian Airlines Group, will take over as CEO and managing director soon. 

 

And, just days before Chandrasekaran’s announcement that he would exit, Air India was hit by yet another serious crew-related controversy. On August 4, an Air India Phuket-Delhi flight experienced a sudden loss of altitude, plunging 300 feet, injuring passengers and crew. 

 

Both pilots underwent mandatory psychoactive-substance screening, and the pilot-in-command subsequently tested positive for marijuana in a confirmatory laboratory test. The Aircraft Accident Investigation Bureau is investigating the incident. 

 

What began in 2022 as a five-year plan to restore Air India to profitability has become a much longer exercise in repairing the airline’s finances, fleet, workforce and safety culture. Chandrasekaran leaves with several major Tata bets still unfinished, and Air India’s transformation is perhaps the most visible of them.