In 2000–01, attempts were made to re-privatise Air India. In 2000, Air India introduced services to Shanghai, China. On 23 May 2001, the Ministry of Civil Aviation charged Michael Mascarenhas, the then-managing director, with corruption. According to the ministry reports, the airline lost approximately ₹570 million (US$6.7 million) because of extra commissions that Mascarenhas sanctioned, and he was later suspended from the airline. In May 2004, Air India launched a wholly owned low cost subsidiary called Air-India Express connecting cities in India with the Middle East and Southeast Asia. Until 2007, Air India mainly operated on international long-haul routes while Indian Airlines operated on domestic and international short-haul routes. In 2007, Air India and Indian Airlines were merged under Air India Limited and the airline took delivery of its first Boeing 777 aircraft. The airline was invited to be a part of the Star Alliance in 2007.
Air India became the 27th member of Star Alliance on 11 July 2014. In August 2015, it signed an agreement with Citibank and State Bank of India to raise $300 million in external commercial borrowing to meet working capital requirements. For FY 2014–15, its revenue, operating loss and net loss were ₹198 billion (US$2.3 billion), ₹2.171 billion (US$26 million) and ₹5.41 billion (US$64 million) compared FY 2011–12, which were ₹147 billion (US$1.7 billion), ₹5.138 billion (US$61 million) and ₹7.55 billion (US$89 million). As of February 2016, Air India was the third largest carrier in India, after IndiGo and Jet Airways with a market share of 15.4%.
On 21 May 2021, it was reported that Air India was subjected to a cyberattack where the personal details of about 4.5 million customers around the world were compromised, including passport, credit card details, birthdates, name and ticket information. Air India's data processor, SITA, reported the data breach to Air India in around February 2021. The data breach involved all information which was registered in the SITA data processor between 26 August 2011 and 20 February 2021, and the cyberattackers gained access to the systems for a period of 22 days. Air India told passengers that there was no conclusive evidence on whether any misuse of the personal data has been reported and urged passengers to immediately change their passwords.
Having failed to sell off a majority stake in the airline, the Government decided to completely exit the airline and invited fresh EOIs on 27 January 2020. In order to attract bidders this time, the government reduced the debt burden on Air India by moving nearly ₹30,000 crore (US$3.5 billion) of the company's debts and liabilities to a Special Purpose Vehicle (SPV). In view of the prevailing situation arising out of COVID-19, the last date for submission of interest was extended multiple times and the Government eventually received EOIs from seven parties by December 2020. Five of these parties were disqualified and the Government invited financial bids for Air India from the two qualified parties in September 2021.
After the airline's acquisition, Tata Group began discussions on bringing the other airlines, including Vistara and AirAsia India, where it held a stake, under a unified umbrella. In November 2022, Air India acquired AirAsia's stake in AirAsia India, renamed it into AIX Connect and announced plans to merge it with Air India Express. On 29 November 2022, Air India announced the merger with Vistara by March 2024 with Singapore Airlines which owns a 49% stake in Vistara getting a 25% stake in the newly formed airline. Vistara brand would be discontinued post the merger and the brand will operate under the Air India name. The National Company Law Tribunal approved the merger between Air India and Vistara on 6 June 2024, followed by Singapore Airlines' FDI approval by the Indian government on 30 August 2024. On 12 November 2024, the merger between Vistara and Air India was completed.
On 15 September 2022, the Tata Group announced Vihaan, a five-year transformation goal aimed at restructuring and transforming Air India in phases. As part of the plan, Air India announced flights to additional international destinations. The route expansion was supported by improving air-worthiness of existing fleet and leasing aircraft from other airlines. On 14 February 2023, Air India announced an order for 470 aircraft consisting of including 250 from Airbus and 220 from Boeing at a cost of US$70 billion, which set the record for the world's largest aircraft order at the time. On 10 August 2023, the airline announced a rebranding exercise named "Vista" with a new livery and logo. On 1 January 2024, Air India announced that it will begin operating its first Airbus A350 aircraft on domestic routes from 22 January 2024 before expanding to international destinations.
As of July 2024, Air India is "consolidating its cargo operations" and plans to start a separate entity or a subsidiary like Air India Cargo to handle cargo operations with dedicated freighters. There has been a 30% increase in the cargo revenues of the Air India Group in FY22-24. The cargo volume is expected to increase to 2.5 million tonnes by 2027. Air India is also developing a "mother software" to handle cargo data and revenue management. The airline is streamlining its cargo operations for optimisation of cargo handling. The airline has initiated a programme to "onboard, engage and expand with regional, national and global customers".
In September 2024, Air India announced a $400 million refurbishment programme to modernise 67 of its older aircraft. The programme will commence with the overhaul of 27 narrow-body Airbus A320neo planes, followed by 40 wide-body Boeing aircraft.
Alliance Air was a wholly owned subsidiary of Indian Airlines established on 1 April 1996. It started operations on 21 June 1996. It was renamed Air India Regional after the merger between Air India and Indian Airlines.
It was renamed back to Alliance Air in 2017 and ceased being a subsidiary of Air India in April 2022 when the Government of India sold Air India to the Tata Group.
Air India's colour scheme is red and white. The aircraft was painted white with red palace-style carvings on the outside of the windows and the airline's name written in red. The name is written in Hindi on the port side fuselage and in English on the port side tail. On the starboard side, the name is written in English on the fuselage and in Hindi on the tail. The window scheme was designed in line with the slogan Your Palace in the Sky. The aircraft was earlier named after Indian kings and landmarks. In 1989, to supplement its Flying Palace livery, Air India introduced a new livery that included a metallic gold spinning wheel on a deep red-coloured tail and a Boeing 747, Rajendra Chola, was the first aircraft to be painted in the new colours.
After the airline's acquisition by the Tata Group, the airline revealed its brand new logo and livery on 10 August 2023. The new livery features a palette of deep red, aubergine, and gold with chakra pattern and the new logo is inspired by the airline's Jharokha window pattern. In December 2023, the airline unveiled new uniforms for its crew and rolled out its new identity with an Airbus A350-900, the first aircraft to be re-branded.
Air India maintained a collection of Indian art from 1956 comprising works of important Indian artists and photographers, sculptures, wood carvings, glass paintings, rare textiles etc. The artworks were often sent to be hung in Air India booking offices around the world and used in promotional material. In 1967, the company commissioned ashtrays from Salvador Dalí and gifted an elephant calf as payment. In 2010, a plan to establish a museum from the collection was stalled and the artworks reside in a building in Nariman Point, Mumbai. Air India organized the first ever exhibition of these art at the National Gallery of Modern Art in Delhi, titled Air India Salutes Indian Masters in 2013. Following a memorandum of understanding agreed between the airline and the Ministry of Culture, the art collection was transferred to the National Gallery of Modern Art (NGMA) in Mumbai in January 2023. The art was put up for exhibition titled Maharaja's Treasure: Select Works of Art from the Famed Air India Collection.
In 1932, Air India started operations with a De Havilland Puss Moth. On 21 February 1960, Air India International inducted its first Boeing 707-420C named Gauri Shankar (registered VT-DJJ), thereby becoming the first Asian airline to induct a jet aircraft in its fleet. In 1971, the airline took delivery of its first Boeing 747-237B named Emperor Ashoka (registered VT-EBD) In 1986, Air India took delivery of its first Airbus A310-300. On 4 August 1993, Air India took the delivery of its first Boeing 747-437 named Konark (registered VT-ESM) In 1989, Indian Airlines introduced the Airbus A320-200 aircraft, which Air India now uses to operate both domestic and international short haul flights. In 2005, Indian Airlines introduced the smaller A319, which is now used mainly on domestic and regional routes. After the merger in 2007, Air India inducted the A321 to operate mainly on international short-haul routes and leased Airbus A330s to operate on medium-long-haul international routes. The airline's first Boeing 777-200LR aircraft was delivered on 26 July 2007, which was named Andhra Pradesh. Air India received its first Boeing 777-300ER aircraft on 9 October 2007 and the aircraft was named as Bihar. Air India received its first Boeing 787 dreamliner aircraft on 6 September 2012 and commenced flights on 19 September 2012.
As a part of the financial restructuring, Air India sold five of its eight Boeing 777-200LR aircraft to Etihad Airways in December 2013. According to the airline, plans for introducing ultra-long flights with service to Seattle, San Francisco and Los Angeles were cancelled due to factors like high fuel prices and weak demand. In April 2014, the airline decided to sell its remaining three Boeing 777-200LRs as well, citing higher operating costs. On 24 April 2014, Air India issued a tender for leasing 14 Airbus A320 aircraft for up to six years, to strengthen its domestic network. By April 2024, Air India has sold four of its last remaining Boeing 747-400 jumbo jets US company AerSale. Two will be converted into freighters and two will be scrapped. Air India is also planning to establish a dedicated subsidiary for cargo operations with dedicated freighters.
On 14 February 2023, Air India announced an order for 470 aircraft with Airbus and Boeing consisting of 210 A320neo family, 40 A350, 190 737 MAX, 20 787-9, and 10 777-9 aircraft for US$70 billion with deliveries beginning late 2023.
On 10 December 2024, an additional order of 100 aircraft with Airbus was confirmed consisting of 90 A320neo family aircraft and 10 A350 aircraft.
In November 2024, the merger between Air India and Vistara was completed, and former Vistara aircraft now operate under Air India. With the merger, Air India customers can, in addition to Air India's own hard product, also experience Vistara's cabin, including its three-class 787-9 Dreamliners (as opposed to Air India's own two-class 787-8 Dreamliners).
Air India's widebody fleet is equipped with seatback on-demand in-flight entertainment systems on which passengers can choose from available content. This varies from the Thales i5000 on the 777-300ER, the Thales i8000 on the 787-8s, to the Panasonic eX3 on the A350-900, 777-200LR and 787-9. The legacy 777 and 787 product will be replaced with Thales' Avant Up system. Thales will also line-fit further deliveries of the A350-900 and the 787-9 with the same system. Air India does not offer seatback entertainment on its narrowbody fleet, with the exception of the A321LR, which uses Panasonic's eX1 system. On its other narrowbodies, and as an interim solution on its legacy widebody fleet, Air India uses the Bluebox streaming IFE service. Namaste.ai is the current in-flight magazine published in English by Air India. It replaced Shubh Yatra (meaning Happy Journey), which was a bilingual in-flight magazine published in English and Hindi.
On 4 September 2024, Air India announced that it will introduce Wi-Fi on board across its fleet by the end of the year. The airline deployed free Wi-Fi in November 2024 on its Airbus A350, A321neo and Boeing 787-9 fleet. Other planes will get Wi-Fi connectivity after they go through a refurbishment. The carrier is the first airline in the nation to offer such complimentary service within India.
Following the merger of Air India and Vistara, Flying Returns and Club Vistara were combined and rebranded as Maharaja Club.
As the flag carrier, Air India is often involved in the evacuation of civilians during wars. The airline entered the Guinness Book of World Records for the most people evacuated by a civil airliner. Over 111,000 people were evacuated from Amman to Mumbai, a distance of 4,117 kilometres (2,558 mi), by operating 488 flights from 13 August to 11 October 1990 – lasting 59 days. The operation was carried out during Persian Gulf War to evacuate Indian expatriates from Kuwait and Iraq. The event was later featured in the film Airlift.
In February–March 2011, Air India evacuated more than 15,000 Indian nationals during the Libyan civil war. In March–April 2015, the airline was involved in Operation Raahat during the Yemeni civil war. In August 2021, Air India evacuated 669 people under Operation Devi Shakti from war-torn Afghanistan during the 2021 Taliban offensive. In February 2022, Air India evacuated Indian citizens from Russia and Ukraine as a part of Operation Ganga during the Russo-Ukrainian War. In October 2023, the airline evacuated people from Israel during the Gaza war as a part of Operation Ajay.
As of June 2025, Air India has been involved in eleven fatal crashes and one ground fatality, two of which were caused by acts of terrorism.
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