Air India Group’s first-quarter FY27 loss exceeded ₹6,000 crore as longer flight paths, higher fuel prices and foreign exchange volatility intensified pressure on its financial recovery.
Air India Group’s losses more than doubled in the April-June quarter of FY27, as foreign exchange volatility, elevated fuel prices and longer flight paths caused by airspace restrictions continued to squeeze the carrier’s finances, according to industry sources cited by businessline. The airline’s net loss rose to more than ₹6,000 crore, compared with over ₹3,000 crore in the same quarter a year earlier.
The setback comes after an especially difficult FY26, when the Tata Group-backed airline reported a consolidated loss of ₹22,238 crore, up sharply from ₹10,858 crore in the previous financial year, The Economic Times reported. Air India has not commented publicly on the latest quarterly figures, but insiders have described the operating climate as increasingly difficult as aviation turbine fuel costs climb and geopolitical disruptions keep reshaping international routings.
Those route changes have been particularly painful on Air India’s Europe and North America services, which have had to fly longer distances to avoid restricted airspace. That has pushed up flying time, fuel burn and crew costs, while also reducing aircraft utilisation. Air India had earlier estimated that the closure of Pakistan’s airspace alone could add about ₹4,000 crore to annual costs, and a senior executive has said restrictions affecting Gulf routes have made the burden heavier in 2026 than in 2025.
Foreign exchange movements have added another layer of pressure because aircraft leases, maintenance and other key expenses are largely denominated in foreign currency. The airline’s forex losses rose to about ₹7,400 crore in FY26 from roughly ₹1,500 crore a year earlier, according to the company’s financials cited in the media. That scale of volatility has left the carrier exposed even as it continues to rebuild its network and fleet.
Air India has begun tightening spending in response. CEO and managing director Tewolde Gebremariam told employees earlier this month that airspace closures, the West Asia conflict and persistently high jet fuel prices were weighing heavily on the business. He said “Cost consciousness must become part of our culture,” and urged staff to show greater frugality, accountability and care in decision-making.
The airline has also imposed stricter approval checks on staff travel and set up a full-time cost-savings team to look for efficiencies across the organisation. Its board has backed those efforts and authorised the chief executive to act on waste and spending controls. It has also approved a plan to bring departments of Air India and Air India Express under a common structure over about six months, while keeping both brands in place.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
