The numbers that Air India and its budget arm Air India Express released this week are far beyond another dismal set of annual numbers. Combined revenue fell by less than 9 percent to Rs 71,870 crore while the combined losses of the two carriers jumped by over 100 percent to Rs 22,238 crore in the financial year ended March 2026. Air India's own losses were at Rs 15,368 crore with revenue of Rs 51,452 crore, while Air India Express had incurred additional red ink of Rs 6,767 crore on revenue of Rs 19,088 crore. The direction is the wrong one for an airline group that Tata Sons has now owned for four years, and billion-dollar dollars has invested in reviving and rebuilding.

It will be easy to place this under the common "India has too few airlines" mantra that came up last December when IndiGo's pilot rostering problem caused the cancellation of thousands of flights and left about half a million passengers stranded. Still, the domestic passengers in India are held by IndiGo and the Air India group, jointly, which accounts for 92 per cent of the market; a domestic market with two players will never be devoid of chaos on the tarmac - it's just a matter of one bad week. However, to read Air India's figures as new proof of the duopoly theory, is to ignore what the figures are saying. This is not a case of market structure. It is a tale of a particular carrier who has not been able to turn things around despite new management and new investments.

Compare the two prime lines side by side and the difference is enlightening. IndiGo has also reported a consolidated net loss of around Rs 2,394 crore in FY26, compared to a profit in FY25. But factor in the loss of approximately Rs 7,358 crore due to the rupee's fall against the dollar by just 10 percent, plus any one-off charges for new labour laws and the disruption in December, and IndiGo's core business shows an operating profit of nearly Rs 14,700 crore, a margin that's higher than 16 percent on a pile of free cash over Rs 36,000 crore. It was a currency and accounting issue, but the underlying business of the airline was good. Air India's loss was not. This was because its revenue actually declined, costs did not decline with it and there are no big "ex-forex" numbers to refer to. For those who are seeking an answer to the question of what is wrong with Indian aviation, that is all the more significant.

It's also important due to how it speaks about the repairs available. In the Indian market, three new entrants have joined the fray in the last year under a civil aviation ministry which has expressed its willingness to accommodate five big airlines. History suggests caution. While Kingfisher, Jet Airways and most recently Go First were all trying to achieve the same thing - market share - they all suffered from a cost structure that punishes scale-up: aviation turbine fuel costs account for 30 to 40 per cent of an Indian carrier's cost of operation, rupee depreciation drives up dollar-denominated leasing and debt costs instantaneously, and regulated fare bands constrain how much of that can be passed on to passengers. The new brand on tarmac doesn't affect any of that arithmetic. In fact, the results of Air India in FY26 are the best evidence that yet the injection of fresh funds or a marquee industrial owner does not alter it either not soon, maybe even not in a decade. This week, Chairman N. Chandrasekaran said as much to shareholders, noting that the turnaround was not to be measured in quarters, but in years, and citing the states the airline was in in 2022, the long awaited shortage of aircraft parts, and the magnitude of technology and culture changes still to be completed.

This is nothing out of the ordinary for anyone outside India. In the past years, state-run flag-carriers have faced tougher competition from leaner carriers everywhere they've been given a chance to compete on commercial terms. Alitalia lost money for 20 years and wasn't until Italy decided to let the small but mighty line take its place that they finally called it quits. The Portuguese state had to bail out TAP Air Portugal several times to keep it alive. Malaysia Airlines has been restructured and recapitalised on several occasions. The convergence of decades of institutionalized habits, inherited overstaffing, legacy fleets and political sensitivities around jobs and routes with airlines created from the ground up around low costs. None of that is a criticism of the competence of the people that fly the aircraft or keep them airworthy, the drag is structural and inherited, not a failure of frontline crews, and melding the two (as some of the commentary around Indian aviation's woes has tended to do) hides the real place where the reform needs to happen: fuel taxation, slot allocation and the capital intensity that makes this one of the hardest businesses in the world to run profitably.

Air India, on the other hand, is not sitting on its laurels as losses continue to mount. It has entered a code-share agreement with Azerbaijan Airlines from this week, formed a partnership with the government to promote tourism, started the process of selling off some of its older A319 planes and will be removing the fuel stop from its flight from Delhi to Toronto from next month. Both of them have a stake in the company, with Singapore Airlines holding slightly more than 25 percent of the company and Tata Sons' having a 73.82 percent stake, putting both parties directly at stake in the success of the turnaround plan. What this week's numbers show is that the plan will take longer, requires more discipline on costs and a policy environment that is prepared to discuss the structural pressures on all Indian carriers not just the other people who can fly.