In an ejector induced downflow bubble column energy supplied as a high velocity liquid jet is utilized in different sections of the ejector-contactor system, which leads to air entrainment at the secondary entrance of the ejector. The energy losses in the different sections, viz. ejector, mixing zone and gas-liquid bubbly flow zone have been evaluated theoretically. Experimental results show that the total energy losses calculated on the basis of theoretical expression are almost the same as energy supplied by the liquid jet. A simple correlation was developed for the air entrainment rate in terms of operating and design parameters of the system.