The crash must prompt fundamental reforms—beginning with the regulator and extending to airline management—as the aviation ecosystem is structurally compromised.

The Indian aviation industry is facing its biggest crisis in decades as it grapples with the devastating crash of Air India’s Boeing 787-8 Dreamliner at Ahmedabad on June 12, 2025. The London-bound AI171 went down just 36 seconds after takeoff, killing over 240 passengers and several others on the ground.

The tragedy has shattered the airline’s narrative of renewal under Tata Group ownership, exposing deep cracks in its safety culture and raising fresh questions about the effectiveness of regulatory oversight in one of the world’s fastest-growing aviation markets.

A pattern of neglect

Air India has been under scrutiny for repeated safety violations in recent years, particularly since Tata Sons took over the airline.

More of that later. In September 2022, Air India unveiled a five–year roadmap called Vihaan.AI, focusing on five key pillars: exceptional customer experience, robust operations, industry-best talent, industry leadership, and commercial efficiency and profitability.

But an entirely different scenario has been unfolding since the Renaissance project was launched nearly three years ago.

A recent Reuters report stated that days before the crash, the Directorate General of Civil Aviation (DGCA) had warned the airline about operating three Airbus aircraft without conducting any inspections of the critical emergency escape slides. According to the report, one aircraft was allowed to fly international routes despite safety checks being overdue by over a month; another had missed inspections by more than three months.

In another instance, and as recently as February this year, the regulator imposed a Rs 30 lakh penalty on Air India for allegedly allowing one of the pilots to operate a flight without complying with certain regulatory norms. The DGCA, in its order, stated that it has found “recurrent rostering issues” among the crew, which violate flight duty time and rest periods.

On an earlier occasion, a DGCA review in 2023 revealed that internal safety audit reports by the airline at major airports, including Delhi, Mumbai, and Goa, had been altered. The report was shared with the regulator after being asked to do so by the regulator. Moreover, it was reported that an unauthorised official had allegedly signed off on safety documents, including medical and ramp checks.

Regulatory shortfalls

The DGCA’s role in this unfolding disaster cannot be ignored, either. It is widely acknowledged that the watchdog is dangerously understaffed and underfunded to an extent that raises serious concerns. Parliamentary data shows half of the posts in the organisation are vacant. Adding to their woes, a Parliamentary Standing Committee reported a 91% cut in funding for civil aviation safety infrastructure earlier this year, even as the number of domestic airports has doubled from 74 in 2014 to 147.

Such a resource crunch is likely to impact the regulator’s efficiency. There have been multiple reports about how audits are conducted in a hurry or are skipped altogether. In the case of Air India, repeated warnings appear to have failed to elicit corrective action.

The economic fallout

The economic impact of the crash is expected to hurt all the stakeholders. According to preliminary estimates, the insurance payout could reach $475 million, making it one of India’s costliest aviation claims. That includes $125 million for the aircraft’s hull and engines, and roughly $350 million in passenger liability.

The ripple effects are already visible. Insurance premiums for Indian carriers, especially those operating Boeing fleets, are expected to rise by up to 100% in the next underwriting cycle. Air India and SpiceJet, both major Boeing customers, may see premiums increase from $28 million to between $40 million and $50 million annually. The cost will likely be passed on to passengers through higher ticket prices, estimated to rise by 2% to 5% or even more on metro routes.

Aircraft leasing costs are also expected to increase, especially for Boeing models. Lessors will now factor in higher risk and insurance liabilities.

Mounting safety breaches

Meanwhile, two former senior flight attendants have written to Prime Minister Narendra Modi, alleging that they were asked to resign from the airline for refusing to lie about a serious safety incident involving the same model of Dreamliner that crashed. According to their June 19 letter, a door malfunction on flight AI-129 in May 2024 resulted in the accidental deployment of an emergency slide raft after the aircraft landed at Heathrow Airport in London. The incident, they say, was hushed up by both the airline and the DGCA, and if there was ever a formal inquiry, it was never made public.

Another whistleblower, Captain Deven Kanani, claims he was dismissed in 2023 after raising the oxygen supply issues on Boeing 777 flights operating on high-altitude routes. According to him, the aircraft had just 12 minutes of oxygen reserve—barely enough in the event of sudden depressurisation.

These incidents don’t appear to be isolated. In 2024 alone, the aviation ministry reported 23 safety violations by Indian carriers, 12 of which involved Air India or its low-fare airline, Air India Express. The violations ranged from unauthorised cockpit access to insufficient oxygen supplies. This led to Air India being fined its largest amount, $127,000.

Need for reform

The crash must prompt fundamental reforms—beginning with the regulator and extending to airline management—as the aviation ecosystem is structurally compromised.

The Government must recruit professionals to manage the DGCA. An earlier experiment to get executives from global consultancy companies to hold key positions in the organisation resulted in chaos rather than strengthening it. The agency should be empowered to hire the best in the business, and remuneration should be market-driven. Surveillance should shift from reactive audits to real-time monitoring using digital tools, predictive analytics, and rigorous flight safety databases.

The Aircraft Accident Investigation Bureau (AAIB) requires increased funding, which would enable the agency to modernise its investigative capabilities. Its Rs 9 crore black box lab reportedly failed to retrieve data from the damaged recorders in the Ahmedabad crash, underlining the need for investment in technical infrastructure.

The Ahmedabad accident is a chilling reminder that when oversight fails, the consequences can be catastrophic. Unless Air India takes immediate steps to address its safety issues, it risks not only losing its market share but also being branded as one of the most unsafe airlines in the world.