Air India Faces Leadership Vacuum and Losses After Fatal Ahmedabad Crash

India's Aircraft Accident Investigation Bureau expects to release its final report within a month on the crash of London-bound Air India Flight AI-171. The plane went down seconds after takeoff from Ahmedabad in western India on June 12, 2025.

The tragedy claimed 260 lives. As the world awaits the findings, Air India confronts deepening challenges. A leadership vacuum, financial losses, airspace closures, and a Middle Eastern fuel shock threaten the carrier's turnaround. Recent incidents have raised questions about its safety record.

Air India remains the Tata Group's largest loss-maker since the conglomerate took over from the government in 2022. It has become a growing concern for the Tata board. Local media reported that the board met last week to discuss cost-cutting measures and warned staff of tough times ahead.

Senior Singapore Airlines executives visited Tata's Mumbai headquarters in April, fueling talk of deeper involvement. Singapore Airlines holds a 25.1% stake in Air India. The carrier declined to comment on a detailed questionnaire from the BBC.

Aviation experts say the recent exit of a key leader leaves a void at a critical time. "They needed a clear vision right now," said 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 one can't really say that it's been a happy ride so far. Between their plan and its implementation, there have been big and growing gaps."

Bhargava cited internal and external factors compounding troubles after the Ahmedabad crash. He said the Tatas underestimated problems inherited from the legacy carrier. The departed leader failed to build a team quickly enough.

Air India's brand has suffered from operational lapses and safety violations over the past year. In March, a flight from Delhi to Vancouver returned to India after nearly eight hours because it lacked Canadian airspace approval. Air India blamed operational reasons.

Alok Anand of Acumen Aviation consultancy called it highly unusual. "This shows there was definitely a breakdown of process somewhere," said Anand, who once headed maintenance for Air Deccan.

India's aviation regulator found 51 safety violations at Air India in last year's audit. Seven were the most serious.

The airline planned to add dozens of new planes, but supply chain issues delayed deliveries and disrupted fleet replacements. It cut routes since 2024, including Delhi-Washington and Mumbai-San Francisco, hurting revenue.

Rupee depreciation against the dollar, down over 10%, has added pressure. Aviation analyst Mahantesh Sabarad said it poses a major challenge, as fuel and other costs tie to the greenback.

Sabarad predicted the Tatas and Singapore Airlines must inject more funds. He compared potential $2.4 billion losses to challenges after Tata Steel's Corus acquisition nearly two decades ago. "Shareholder support is required," he said. "The Tatas didn't give up then and have experience dealing with such scenarios… but they should start looking at innovative financing arrangements going forward."

Alok Anand warned losses could worsen before improving. He linked projected figures to refurbishment payments, lessor penalties for old planes, high fuel costs, currency drops, and route closures. The Middle East conflict offered Air India a chance to gain international market share as Gulf carriers weakened.