Everyone who flies in and out of India has an Air India theory. Mine is simple. The airline will survive. The airline it was supposed to become will not.
In 2022 the Tata group, the Indian conglomerate, bought Air India back from the government and promised to make it a hub carrier: an airline that moves the world through Delhi the way Emirates, the Dubai airline, moves it through Dubai. That is not going to happen. Most of the reason is the Indian state’s doing. Some of it is Air India’s own. I want to keep the two apart.
You cannot connect through India
A hub is a place where passengers change planes without noticing. The point is arithmetic: Delhi alone cannot fill a daily flight to New York, but fifty cities passing through Delhi can. Dubai does this with a corridor and a coffee.
On paper India can do it too, for passengers arriving from abroad: Delhi and Mumbai let you change from one international flight to another without immigration if both are on one ticket. Almost nobody does. Delhi handled 1.34 million such transfers in the year to March 2025, and most of those were IndiGo’s narrow-body passengers between Central Asia and Southeast Asia, not anyone off an Air India 777 from New York. India sits halfway between Europe and Southeast Asia and nobody connects through it. By Air India’s own estimate, 85% of the 20 million people a year who connect to or from India do it at a foreign airport.
The bigger prize is Indians themselves, from a hundred cities at home, feeding the long-haul flights. That is where the problem stops being paperwork and becomes a queue. No Indian airport lets you land from Goa and walk, still inside security, onto a flight to London. You land as a domestic passenger, collect your bag, check in again and clear immigration. In Mumbai you also take a bus to a different building.
The fix, launched in June 2026, is Easy Connect: immigration at the airport you start from, bag tagged through, no queue in Delhi. The small print: in-person check-in three hours before departure, compulsory enrolment in DigiYatra (the government’s facial-recognition boarding app), outbound only, and after three months three cities, all in the north. A feeder flight under those rules is a six-hour commitment before the long-haul leaves. That is the Dubai one-stop, minus the lounge.
And who would feed it? IndiGo, India’s big low-cost airline, carries 66% of domestic passengers. The Air India group is at 24 to 27%; the 2022 plan promised 30%. Nor does domestic flying earn anything to subsidise a hub with: IndiGo, the cheapest operator in the country, reported revenue of 5.2 cents per seat-kilometre against a cost of 5.2 cents [₹4.99 against ₹5.00] last year. In the month Easy Connect went live, Air India cut Delhi to Mumbai, its trunk route, from 28 flights a day to 21. You cannot build banks of connections on a route you are shrinking.
Geography finishes it. Delhi sits in the far north, which is why the three Easy Connect cities are northern. From Bengaluru or Chennai in the south, Delhi is a three-hour flight the wrong way for the Gulf, and for Europe Dubai is on the way and Delhi is not. Mumbai, the obvious second hub, has two runways that cross and work as one, and has been capped at 44 take-offs and landings an hour by ministerial order since 2024.
India handed the Gulf the margin
So the connecting happens elsewhere, at the three Gulf hubs: Dubai, Doha and Abu Dhabi, home to Emirates, Qatar Airways and Etihad. They touch half of India’s international passengers, 50.9% of the 78 million who flew in or out of India in 2025, and roughly 70% of their passengers out of India are not going to the Gulf at all. They are going to Manchester, Toronto and Melbourne, with a stop.
The usual explanation is Gulf subsidy. Maybe; nobody has published a cost-per-seat comparison since 2014. What I can see is the part India did to itself.
India’s national sales tax, the GST, is one businesses claim back on what they buy. Jet fuel is kept outside it and carries a federal excise duty plus a state tax of up to 29% instead, none reclaimable, all a percentage of the price, so when crude doubles the tax doubles. The Gulf states and Singapore tax jet fuel at zero. An Indian think tank puts Indian airlines’ fuel cost at about 65% above global peers. Between 35 and 50% of an Indian airline’s costs are in dollars, and the rupee has gone from 84 to the dollar to 96 in two years. Then in September 2025 the government raised the sales tax on business-class and premium-economy tickets from 12 to 18% and left economy at 5%. It taxed the one cabin a full-service airline lives on.
Emirates made $6.2 billion last year. Air India lost $2.3 billion [₹22,238 crore; a crore is ten million rupees].
And the one thing geography gave Air India, the nonstop, has been taken away. The short way from Delhi to New York goes over Russia. American airlines have been barred from it since 2022; Air India has not, which gave it three-quarters of the nonstop seats between India and North America. Then in April 2025 Pakistan, directly west of Delhi on the way to everywhere, closed its airspace to Indian airlines, and has kept it closed since. The detour adds two to four hours to North America. Air India’s weekly flights there went from 65 in January 2025 to 31 this summer. It asked the government for help with a bill it put at about $600 million a year. None has been reported.
The proof that this is India’s problem, not Air India’s, is IndiGo. It tried London and Manchester with leased Boeing 787s and gave up at the end of July 2026, citing airspace, fuel and the rupee. If the lowest-cost airline in the country cannot make India to Europe work, the handicap is not management.
Nobody has done it
Every Indian airline that tried to sell a full-service product has failed. Jet Airways, the main private airline until it collapsed in 2019, made money in two of its last ten years. Vistara, the premium airline Tata built with Singapore Airlines, burned about $1.2 billion [₹9,900 crore] and never had a profitable year. State-owned Air India made no profit after 2007 and had piled up roughly $10 billion [₹70,820 crore] of losses by 2020. All shared taxed fuel, dollar costs and some of the lowest domestic fares per kilometre in the world. None of that has changed.
This year’s $2.3 billion is mostly shocks: a $770 million [₹7,388 crore] currency loss, jet fuel going from $99 to $163 a barrel when war with Iran began in February, the Pakistan detour, and the crash at Ahmedabad in June 2025 that killed 260 people. But the group lost $1.2 billion [₹10,122 crore] in the year to March 2024 with no crash, no closure and no war, and $1.3 billion [₹10,859 crore] the year after.
The 2022 turnaround was a five-year plan; in July the chairman of Tata Sons, the group’s holding company, called it “a five to ten year journey”, and the chief executive who launched it had resigned in April. The money is still there, $2.3 billion [₹21,841 crore] of cash at a debt-free Tata Sons, but look at the terms. The next $1.1 billion [₹10,000 crore] comes in instalments tied to targets. Singapore Airlines, which owns a quarter of Air India, wants more say on the board before it pays its share. The charitable trusts that own two-thirds of Tata Sons are citing Air India’s losses in a legal fight with the chairman who bought it. Patient capital has become conditional capital. And nobody outside can check: Air India is unlisted and publishes nothing on how full its planes are or which routes make money. Every claim that the New York flights are full comes from an interview.
The part that is Air India’s own
Air India today is two airlines in one paint scheme. On the Airbus A350, the business class is, in one much-travelled reviewer’s words, “now actually globally competitive”. There are six of them. On the Boeing 777s that fly much of North America, a business-class passenger from Delhi to Toronto was handed a printed “generic broken seat waiver” to sign last September. The telling word is “generic”. An airline does not print a form for a problem it has once.
The first refitted 787 came out of the hangar in April 2026, a year late; the last will not until mid-2027, and the thirteen 777s not until October 2028. Air India says half its long-haul fleet will be refreshed by year end; count the aircraft and most long-haul passengers are still in the old cabin as I write.
Punctuality is the one number that looks good, for a bad reason. Cirium, the aviation data firm, ranked Air India the fourth most punctual airline in the world in June 2026. That was the month it cut 27% of its flights. You can be on time if you fly less. You cannot run a hub that way.
Britain is the control experiment, the one long-haul market where nothing went wrong for Indian travellers: visas up, flights up, the other airlines on the route up 10 to 15%. Air India’s traffic fell 19% in September 2025 and 27% in April 2026. Same market, same fuel, same detour. That gap is the crash’s commercial tail, and it is Air India’s own. The rest of the story is India’s.
What it will be
The case against me is demand, forecast to grow at 5.6% a year for twenty years, and the Gulf’s own fragility: when the Iran war closed Gulf airspace in February, Qatar Airways cancelled 89% of its schedule for a month. But look who picked it up: Lufthansa, British Airways, Virgin Atlantic and Singapore Airlines added flights around the Gulf. Air India, hit by the same fuel price plus Pakistan, cut 27% of its own. The Gulf’s weak month was not Air India’s strong one.
The new chief executive, Tewolde Gebremariam, started on the first of this month. He built Ethiopian Airlines into a profitable hub carrier, with an airport built around the airline and a state owner that left him alone. He will have neither. Watch whether his first network plan admits what geography already has.
So Air India will not go the way of Jet. Tata has the money, if its board can agree to keep spending it; the government has the motive; and there is a real business in flying people nonstop between India and North America and Britain, with Lufthansa selling the rest of Europe. Even that has a problem India cannot fix: American student visas issued to Indians fell 62% in the 2025 peak season, and students and their visiting parents fill the back of a 777 to San Francisco in August. Still: a smaller, better airline that loses less each year and gets a new cabin every few months until 2028. That is a respectable thing to be.
It is not Emirates. It will not be, because the things that make a hub, fuel without tax, an airport that subsidises transfers, a passport check you never meet, and a domestic market that pays, are all decided by the Indian government, and none in Air India’s favour. The one change that would do more than anything Tata can do inside the airline is to bring jet fuel into the national sales tax, capping the rate and letting airlines claim it back. The temporary state fuel-tax cuts expire in November. The airlines asked again in July for the permanent fix. They have been asking since 2017.