Air India crisis deepens ahead of final Ahmedabad crash report

Air India crisis deepens ahead of final – India’s Aircraft Accident Investigation Bureau (AAIB) is set to release its definitive analysis of the June 12, 2025, crash of Air India flight AI-171, which plummeted shortly after takeoff from Ahmedabad. The report, due within weeks, will likely shed light on the circumstances that led to the disaster, which took the lives of 260 passengers and crew. As the global aviation community watches closely, Air India faces mounting pressures that threaten to undermine its efforts to restructure and stabilize operations.

Amid the fallout from the crash, a series of interconnected issues have compounded the airline’s struggles. Leadership instability, accumulating financial deficits, restricted airspace access, and a fuel crisis in the Middle East have all intensified the challenges, casting doubt on its long-term recovery plan. These problems are not isolated; they form a complex web of internal and external factors that have destabilized the carrier’s progress since its privatization in 2022.

The recent resignation of Campbell Wilson, Air India’s chief executive officer, marks a pivotal moment in the airline’s turbulent journey. Wilson stepped down earlier this month, with reports citing annual losses of $2.4 billion by March 2026 as a key reason. His departure leaves a critical leadership void at a time when the airline desperately needs direction to navigate its current crossroads. The Tata Group, which acquired Air India from the government in 2022, now grapples with the fallout, as the carrier remains its largest loss-making entity. This has triggered growing unease within the group’s board, which recently convened to discuss austerity measures and signal to employees that “tough times” are ahead.

Meanwhile, the arrival of Singapore Airlines executives in Mumbai has reignited speculation about deeper collaboration between the two airlines. Singapore Airlines, a 25.1% shareholder in Air India, is poised to play a larger role in its turnaround, according to industry observers. However, the airline’s internal management struggles continue to overshadow these potential efforts. Aviation experts note that Wilson’s exit has created a leadership vacuum, which could delay critical reforms. “They needed a clear vision right now,” says Jitendra Bhargava, a former executive director at Air India. “Air India had given itself a five-year plan to revamp itself after the privatisation, but significant gaps persist between the plan and its execution.”

The airline’s operational track record has also come under scrutiny, with several notable incidents highlighting its shortcomings. In March, a flight from Delhi to Vancouver had to return to India after nearly eight hours due to a lack of regulatory clearance to enter Canadian airspace. While Air India attributed the mishap to “operational reasons,” Alok Anand of Acumen Aviation consultancy argues that the delay was “highly unusual” and indicates a systemic breakdown in processes. “This suggests there was a failure in coordination or compliance at some level,” Anand adds, emphasizing the need for thorough investigations into such lapses.

Further evidence of Air India’s operational issues emerged from the country’s aviation regulator, which identified 51 safety violations during its annual audit. Among these, seven were classified as high-level, underscoring systemic weaknesses in safety protocols. These findings have not only intensified criticism but also raised questions about the airline’s ability to meet international standards. The crisis is compounded by external pressures, including supply chain disruptions that have delayed the delivery of new aircraft. With an expanded fleet planned, these delays have disrupted replacement schedules, forcing the airline to rely on older models and increasing maintenance costs.

Another pressing concern is the depreciation of the Indian rupee, which has fallen over 10% against the US dollar. This trend has placed additional strain on Air India’s finances, as a significant portion of its expenses—particularly fuel costs—are tied to the greenback. “The rupee’s decline has been a major challenge for the turnaround,” explains Mahantesh Sabarad, an aviation analyst. “Fuel prices have surged, and the airline’s reliance on foreign currency has only exacerbated its financial burden.”

Route cuts have also contributed to the airline’s revenue challenges. Since 2024, Air India has reduced its network, eliminating key services such as the Delhi-Washington and Mumbai-San Francisco routes. These adjustments, while possibly necessary due to market dynamics, have impacted passenger traffic and profitability. Sabarad highlights that the airline’s financial situation is now comparable to the steep challenges faced by Tata Steel when it acquired UK’s Corus Steel nearly two decades ago. “The Tatas didn’t give up then, and they have experience managing such scenarios,” Sabarad says. “But they