Air India Faces Deep Traffic Collapse and Seeks Fresh Equity
Reputational damage from a 2025 Ahmedabad crash has driven regulator‑recorded passenger losses, forced owners to weigh roughly $1.5bn in new capital, leaving the airline pressing ahead with major fleet orders.
Overview
- India’s aviation regulator reported a 36% year‑on‑year fall in the Air India Group’s global passenger carriage in the April–June quarter, while foreign carriers grew traffic to and from India.
- Route‑level analytics show the India–UK market reversed from strong growth in early 2025 to steady monthly declines from August 2025, with passenger demand falling faster than Air India cut seats.
- Multiple passengers told reporters they avoid the carrier because of fear and distrust after the June 2025 Ahmedabad crash, a reputational hit that industry analysts link to the sustained drop in bookings.
- The group posted record annual losses and is reportedly seeking about $1.5bn in fresh equity from owners Tata Sons and Singapore Airlines as management warns the turnaround could take years.
- Despite the downturn, Air India continues plans to add roughly 100 aircraft in 2027–28 and retrofit 16 Boeing Dreamliners, a strategy that leaves the carrier exposed to short‑term cash strain while foreign rivals gain market share.