Air India clears most interim compensation claims after crash, expect normalized aircraft deliveries in 2026: CEO Wilson

Air India has disbursed ₹60 crore interim compensation for 230 of the 248 victims of the crash that occurred on 12 June, the airline's chief executive officer said.

The compensation update from chief executive officer (CEO) Campbell Wilson comes as the Tata-backed carrier navigates a turbulent year marked by the accident and significant operational challenges.

Additionally, family members of 70 individuals have been given ₹1 crore each through the Tata Group, which had set up a trust to assist the people who died in the country’s worst civilian air crash in more than a decade. The families of another 50 who died in the crash are in the process of getting ₹1 crore each, according to the airline.

“We continue to reach out to the families of those affected…our commitment to those who have had a loss will continue for as long as it takes,” Wilson said in an interaction with the media on Monday in Delhi.

The compensation from Air India comes as the Tata-backed airline attempts to navigate through a challenging year.

Wilson acknowledged that 2025 has been an “exceptionally difficult year.” The challenges include the June crash and the financial impact of the May airspace closure by a neighbouring country, which forces Air India to fly circuitous routes over the Arabian Sea. Last month, he stated the closure could cost the airline ₹4,000 crore in losses if it lasted for a year.

Fleet modernisation

Wilson said the carrier’s retrofit programme, which involves refurbishing its current aircraft to install new seats and entertainment systems, has been delayed due to supply constraints.

Air India expects its fleet modernisation programme to be completed in 2028, rather than the earlier stated 2027. He described the supply chain as “constrained,” affecting seats, cabin components and aircraft availability across the industry and Air India.

“It’s a five-year transformation programme for a reason because it cannot and would never have been done overnight. And so we just have to keep focused on the objective and work through,” Wilson said.

“What it ultimately means is we expected to have all of the legacy aircraft refitted within the five-year transformation period. It'll probably have a little bit of a long tail where a few of the triple sevens will push out into the sixth year,” he added.

Air India, which is undertaking one of the world’s largest commercial aircraft interior retrofit programmes, had also planned to retire 17 older narrow-body aircraft. However, these will be reinducted into the fleet as delivery delays continue.

The wide-body turnaround has proven to be more complex. The first two 787-8s currently in Victorville, California, “are receiving completely new interiors. They should come back into service in February 2026. Thereafter, we will push through two to three aircraft every month,” Wilson said in response to a question from Mint.

The airline will receive 26-30 new jets in 2026 (and one in December 2025), which includes six wide-bodied aircraft for long-haul flights and 20 narrow-bodied ones.

After acquiring Air India in 2022, the Tatas outlined a $400 million programme to modernise its current fleet by early 2027. This retrofit programme is in addition to the order placed by the carrier with Boeing and Airbus to buy 570 new planes.

Fund infusion

Its existing fleet size, including Air India Express, stands at 297.

“The airline’s capacity will therefore remain comparatively flat in 2026,” he said.

To a question on whether it was seeking fund infusion from promoters, Wilson replied in the negative.

Privately held Air India reported revenue of ₹78,636 crore last year, a 15% jump. However, losses widened from ₹7,356 crore to ₹10,859 crore.

According to Gagan Dixit, an analyst at Elara Capital, Indian carriers like Air India are already feeling the supply-side constraints. “There will be some pressure on Air India’s numbers until the delivery schedules for its aircraft normalise. Compared to market leader IndiGo, there could be some increase in non-fuel costs for Air India. It will also need to rework routes as new airports open up and if it continues to face new aircraft delivery delays.”