Tata Sons' Chandrasekaran says Air India turnaround could take a decade amid deepening losses

Tata Sons has reset expectations for Air India's revival, with chairman N. Chandrasekaran telling shareholders that building a global airline is a five- to 10-year effort rather than a matter of quarters, signalling the turnaround will take longer than originally envisaged.

The comments, made in Tata Sons' FY26 annual report released on Monday, are the first time Chandrasekaran has publicly framed Air India's transformation over such a long horizon since the Tata Group regained control of the airline in January 2022.

“Every great airline in history was built over decades, not quarters,” Chandrasekaran wrote. “Given where it began, Air India's transformation must be seen as a five- to ten-year journey, considering the years-long supply chain disruptions in key components, the need to overhaul legacy systems, culture and fleet, and the creation of a large cadre of technical and airline professionals.”

He described the task as rebuilding the airline through “fleet renewal, training, service transformation and network expansion.”

The remarks effectively extend the timeline beyond Vihaan.AI, the five-year transformation programme unveiled in September 2022 under outgoing chief executive Campbell Wilson to restore profitability and rebuild Air India into a world-class carrier.

Instead, FY26 became Air India's toughest year since returning to the Tata fold. The closure of Pakistani airspace from April 2025, the fatal AI171 crash in June of same year, the conflict in West Asia and higher fuel costs disrupted operations, while aircraft delivery delays constrained expansion.

Air India also cut several domestic and international routes to stem losses. Wilson, meanwhile, announced his resignation in April and is expected to step down in September. A successor is yet to be announced.

Losses widen

The difficult operating environment was reflected in Air India's financial performance.

Air India and low-cost subsidiary Air India Express posted a combined net loss of ₹22,238 crore in FY26, more than double the previous year's ₹10,859 crore, while combined revenue fell nearly 9% to ₹71,870 crore. Air India reported revenue of ₹51,452 crore and a loss of ₹15,368 crore, while Air India Express posted revenue of ₹19,088 crore and a loss of ₹6,767 crore.

The widening losses left Air India further behind market leader IndiGo, which reported revenue of ₹84,962 crore in FY26, up from ₹80,802 crore a year earlier, although it swung to a net loss of ₹2,394 crore, largely because of foreign exchange losses.

Air India is owned 73.82% by Tata Sons, 25.1% by Singapore Airlines and 1.08% by employees under a share benefit scheme created during the 2022 privatization.

Chandrasekaran called FY26 Air India's most challenging year under Tata ownership.

“Few businesses are as vulnerable to war and fuel pressures as aviation,” he wrote, citing airspace closures, West Asia-driven fuel price increases, foreign exchange fluctuations and the AI171 crash. He said the airline's teams had responded with “resilience and adaptability”.

Aircraft delivery delays also constrained expansion plans, limiting Air India's ability to add capacity as travel demand remained strong.

Progress, but questions remain

Despite the setbacks, Chandrasekaran said the turnaround is beginning to show results. Air India's net promoter score improved from -35 in FY23 to +42 in June 2026, all domestic narrow-body aircraft have been refurbished, and refurbishment of the wide-body fleet—around a year behind schedule—is expected to finish by the end of FY28.

"Our commitment is to give India a carrier that connects it to the world with pride," Chandrasekaran wrote.

Analysts said the revised timeline raises fresh questions over the airline's path to profitability.

“If it is being said the airline will turn profitable in another five to 10 years, then it is still a long time frame,” said Amit Mittal, aviation expert and director of Aerointellect Aviation. “Investors and banks may start questioning the timeline.”

Mittal said Tata Sons also needs to clarify whether Air India will continue to be supported by cash flows generated by its more profitable businesses during the turnaround. “Shareholders in these companies too could start questioning Tata Sons if a clear roadmap isn't laid out,” he said.

Gagan Dixit, senior vice-president for oil, gas and aviation at Elara Securities, said the revised timeframe appeared more realistic but lacked strategic clarity.

"The transformation or turnaround plan may sound more grounded in reality now, but these initiatives were announced several years ago. And are already underway," Dixit said.

"Airline turnarounds typically take five to 10 years," he said, adding that it remains unclear how Air India intends to achieve that goal—whether through faster fleet induction, expanding profitable routes or reducing costs.