ISLAMABAD: Air India's transformation under new ownership has turned into an operational disaster, marked by pilot rebellions over pay cuts, a fatal crash, safety violations, and geopolitical airspace closures, resulting in a $2.8 billion loss and significant route reductions.
The crisis began in early 2024, when the Tata Group imposed unified contracts, slashing pilot guarantees from 70 to 40 flight hours per month, according to The Hindu. First officers faced a 57% pay reduction and had to fly 76 hours to match previous earnings. Sixty pilots transitioning from AirAsia India struggled with 900,000 Indian rupees ($9,434) in training debts, now impossible to service.
By March 2024, two pilot unions sent a joint letter to Tata Chairman N. Chandrasekaran, warning that the changes had reduced aviators to "bonded labor," according to The Hindu. Between March 31 and April 2, sick-out protests forced 150 flight cancellations. At least 15 senior first officers resigned.
Cabin crew discord erupted in May 2024 when Air India Express workers staged a mass sick leave, canceling 90 flights and affecting 13,000 passengers, according to The Times of India. Management initially fired 25 employees before reversing course following mediation.
On June 12, 2025, Flight AI171 crashed near Ahmedabad in western India, killing 242 people on board and 19 on the ground, according to AFP. The director-general of the civil aviation (DGCA) subsequently found that 83% of Air India's aircraft exhibited recurring technical defects, according to the analysis cited in the original document.
In February this year, the DGCA fined Air India 10 million Indian rupees ($104,845) for flying an unairworthy Airbus A320 on eight revenue flights, according to The Hindu.
Pakistan closed its airspace to Indian carriers following a military confrontation in May 2025. Air India then requested the Indian government to press China for access to sensitive Xinjiang airspace to reduce costs and flight times, according to an internal company document reported by Indian media.
The airspace closure reportedly cost the carrier $455 million, nearly matching its entire fiscal year 2024-25 pre-tax loss of $439 million, according to a parliamentary response by the Indian Minister of State for Civil Aviation.
A similar Pakistani airspace closure in 2019 cost Air India and other Indian carriers at least $64 million over five months.
For the fiscal year ending March 31, Air India posted a $2.8 billion consolidated loss, according to PRESS Insider and The Economic Times. Singapore Airlines, holding 25.1%, saw profits collapse 57.4%.
The once fledgling carrier was forced to request temporary government subsidies to offset the financial impact.
