Dissociation of zircon through thermal plasma has been conventionally carried out in argon or nitrogen medium at high input power levels. This paper discusses a promising one-step process for in-flight dissociation of zircon to produce zirconia in air plasma medium. A specially designed plasma torch consisting of a hollow cathode made of graphite and graphite anode nozzle was used to produce the air plasma jet. Further, the influence of carbon addition with zircon on the dissociation process in air plasma medium was examined. Thermodynamic analysis using free energy minimization plot showed that addition of carbon significantly promoted the reaction by lowering the dissociation temperature. Temperature profile of the plasma jet obtained from simulation studies showed that air plasma provided an extended hot zone with much lower temperature gradient and this facilitated efficient processing of zircon. Results of these investigations showed that addition of carbon enhances the dissociation of zircon along with simultaneous removal of silica at lower power level.