Air India’s $2.79 billion loss drags down Singapore Airlines’ profit

Air India posted a full-year loss of US$2.79 billion (₹26,798 crore), inflicting a US$743 million hit on Singapore Airlines’ bottom line in the first full year since the carrier acquired a 25.1% stake in the Tata Group airline, dragging it into a sharp profit decline despite record operating profit.

Singapore Airlines (SIA), which holds a 25.1% stake in Air India, reported a 57.4% fall in full-year net profit to $930 million (SGD $1.18 billion) even as operating profit surged 39% to $1.89 billion (SGD 2.4 billion). Its annual statement also showed Air India’s hefty annual losses.

A reckoning for India’s aviation sector 

The financial year 2025-26 marks the first full year in which SIA absorbed the impact of Air India’s losses after acquiring its stake in the merged Air India-Vistara entity in November 2024.

In a press statement, Singapore Airlines attributed the sharp decline in net profit to “the absence of a prior year one-off accounting gain, coupled with the share of full year losses from Air India.”

The financial year 2025-26 marks the first full year in which SIA absorbed the impact of Air India’s losses after acquiring its stake in the merged Air India-Vistara entity in November 2024.

Last year, SIA had benefited from a $866 million (SGD1.098 billion) non-cash accounting gain arising from the completion of the Air India-Vistara merger. In comparison, FY25 reflected only four months of exposure to Air India’s losses, while FY26 accounted for the entire year.

Air India’s losses came amid a year marked by multiple headwinds, including a sharp dent in passenger demand following the June 12, 2025 Ahmedabad crash, weakening travel demand from the U.S. market, ban of Pakistan airspace for Indian carriers, as well as airspace restrictions in West Asia due to regional tensions that has forced 5-6 hour longe detours for Air India flights to North America and sharply raised fuel costs.

On Wednesday (May 13, 2026), the airline announced a 27% reduction in flights across its international network as soaring aviation turbine fuel costs and operational disruptions weighed heavily on profitability. The impact spilt beyond west-bound operations, affecting even east-bound routes to SAARC nations, Southeast Asia and the Far East.

Singapore Airlines, though, said on Wednesday (May 13, 2026) that it was committed to the Air India joint venture, adding, “Air India faces headwinds such as industry-wide supply chain constraints, airspace restrictions, constraints on operations to its key Middle East markets, and elevated jet fuel prices. Nonetheless, it continues to make progress in its fleet renewal and aircraft retrofit program, initiatives to elevate the end-to-end customer experience, and improve its operational performance.”