Air India's ₹26,800 Cr FY26 Loss Hits Singapore Airlines' Profit by 57%

Air India, the flag carrier of India, has reported a staggering loss of approximately ₹26,800 crore (equivalent to around $2.8 billion or SGD 3.56 billion) for the financial year 2025-2026, marking its most substantial annual deficit since its re-acquisition by the Tata Group in 2022. This significant financial downturn has had a profound impact on its major shareholder, Singapore Airlines (SIA), which saw its net profit decline by a substantial 57.4% to S$1.18 billion for the fiscal year ended March 31, 2026. The primary reasons cited for Air India's exacerbated losses include severe operational disruptions, notably triggered by geopolitical tensions such as the war in Iran and Pakistan's continued ban on Indian airlines utilizing its airspace. These restrictions have forced longer flight routes, leading to increased fuel consumption and higher operational costs. Additionally, industry-wide supply chain constraints and elevated jet fuel prices have further compounded the financial pressures on the airline. Singapore Airlines, which holds a 25.1% equity stake in Air India, disclosed these figures in its annual financial report released on May 14, 2026. The sharp drop in SIA's net profit is primarily attributable to two key factors: the full-year accounting of Air India's losses and the absence of a one-time, non-cash accounting gain of approximately S$1.1 billion (or $861.9 million) that was recognized in November 2024 following the completion of the Air India-Vistara merger in the previous fiscal year (FY25). In FY25, SIA's financial results reflected only four months of exposure to Air India's losses, whereas FY26 accounted for the entire year, significantly impacting its bottom line. Despite the considerable decline in net profit, it is important to note that Singapore Airlines' core operational performance remained robust. The group reported a record revenue of S$20.522 billion, a 5% increase year-on-year, and its operating profit surged by 39% to S$2.4 billion, driven by strong demand for air travel, higher passenger yields, and lower net fuel costs. This indicates that the decline in net profit was largely due to the accounting treatment of its investment in Air India and the non-recurring gain, rather than a deterioration of its fundamental business. The auditor, KPMG, in a report included within SIA's disclosures, highlighted "impairment indicators" concerning the investment in Air India, citing challenging operating conditions and heightened geopolitical uncertainty. Air India itself has been forced to temporarily reduce or suspend several international flights through August 2026, particularly to its key Middle East markets, as a measure to curb costs and manage the unprofitability of certain routes due to airspace restrictions and high fuel prices. However, Singapore Airlines has categorically reaffirmed its ongoing commitment to its strategic investment in the Indian airline group, considering it a core component of its long-term multi-hub strategy. SIA stated that this investment provides a direct stake in one of the world's largest and fastest-growing aviation markets, complementing its Singapore hub and strengthening its long-term growth prospects. The airline group is actively working with Tata Sons to support Air India's multi-year transformation program, which includes fleet renewal, operational upgrades, and customer experience enhancements. Air India is not publicly traded on the Indian stock exchange and has not yet filed its financial statements with local regulators, and it declined to comment on the reported figures. The extensive coverage of this news across multiple credible Indian and international financial news outlets (The Economic Times, Moneycontrol.com, The Times of India, Business Today, The Hindu, Reuters, PTI) corroborates the accuracy of the major claims and facts presented in the original article.

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