I cannot see this changing anytime soon. I think from its inception, Air India’s transliteration in Devanagari has always been एअर इंडिया – see the logo. Air India’s website could have been such a rich archive of old photographs, but it’s under construction and slow to load. I could not find old photographs that showed the first instance of Hindi logos.
Surely, if India had a Y sound in it, it would have been spelt as Indiya. So who was the bright spark in the Tata empire who allowed this? I expected more from Parsis, who are generally well-versed in English.
Moreover, why does the single-syllable English word “air” become two syllables “eh- uhr” in Devanagari? If anyone at Air India cares, the transliteration should be:

एर इंडिआ

Try reading it aloud. That’s how we say it in English.
In the early days of Indian Airlines, the transliteration took a different flight path:

इनडियन एयरलाइन्स

That looks like Indiyan Aiyerlines.

(Image courtesy Air India)

It Gets Worse

Other companies have caught this ailment. Take IndianOil for example. Its logo uses Devanagari. I would back-transliterate it as “Indiyan Oyal” Why not:

इंडिअन ऑईल

Baink of Indiya?

Let’s look at one more example, where my dad kept his money for many years – the Bank of India. Yes, you guessed right – another Indiya. The transliteration of “bank” differs between Hindi and Marathi when it comes to banks in general. The one seen here is the Hindi one, which reads “baink”. The transliteration plugin here is broken, so I can’t show how it looks in Marathi, but here’s the logo of the Bank of Maharashtra/Maharashtra Bank (they can’t make up their mind).