Air India, under Tata Group ownership, has officially broken even at the operating profit level in FY25, with revenue up nearly 14% to ₹61,000 crore (~$7.3 billion). This marks a remarkable turnaround fueled by strategic reforms under its Vihaan.AI transformation program.
Key Drivers Behind the Profit
Lower Fuel Prices & Merger Synergies
Declining fuel costs and operational efficiencies achieved post-merger with Vistara played a critical role. The integration has unlocked economies of scale and eliminated redundancies.
Increased Passenger Volumes
The airline carried 44 million passengers in FY25, a 9.9% YoY increase—helping drive higher revenues and improve aircraft utilization.
Efficiency Boosts via Vihaan.AI Program
Launched in September 2022, Vihaan.AI is a five-year transformation plan. By FY25, Air India is halfway through, having upgraded systems, retrained staff, and improved on-time performance and customer experience.
Operational Highlights
Positive Operating Metrics
Air India’s EBITDAR (earnings before interest, taxes, depreciation/amortization, and rent) is now in positive territory, confirming operational profitability despite outstanding debt.
Fleet Modernization & Retrofit Program
More than half its fleet has been retrofitted with upgraded cabins, and a plan for 570 new aircraft is underway. These moves aim to refresh Air India’s global premium appeal.
Customer Satisfaction Gains
Customer loyalty—measured by Net Promoter Score (NPS)—has reportedly surged by over 45 points in the past 18 months. On-time performance now rivals or exceeds peers in several segments.
Broader Context and Future Outlook
CEO and Industry Praise
CEO Campbell Wilson noted that Air India is on track to profitability after three years of structural changes. Industry leaders, including Paytm’s Vijay Shekhar Sharma, congratulated the turnaround, with Sharma expressing eagerness for continuous cabin upgrades.
Geopolitical & Operational Challenges
Airspace restrictions from Pakistan are extending flight durations, adding to costs. Still, leadership remains confident it can navigate these hurdles.
Industry-Wide Significance
This profitability milestone signals a resurgence in India’s aviation sector post-privatization. Air India’s revival also sets a benchmark for long-haul service and premium segment competitiveness. livemint.com
What’s Next for Air India?
- Complete Vihaan.AI rollout by FY27, with full system upgrades and streamlined operations
- Expand retrofit to an additional 35% of wide-body aircraft by FY28
- Further fleet expansion via new aircraft for global megaports
- Boost non-fuel efficiencies to shield against external disruptions
Final Thoughts
Air India’s return to operating profitability in FY25—with a 14% leap in revenue—marks a critical milestone in its revival. Through disciplined execution of fleet, financial, and customer transformations, it has laid a solid foundation for future growth and premium market prominence.