In the book Behind The Hits, Albert Hammond explained the inspiration for the song: "I just fell in love with a girl," he said. "We had some kind of short affair. I just fell in love so bad, I guess I needed to be with my family. I was so lonely in Los Angeles."
So he moved to LA for a girl, but the song isn't really about her - it's more inspired by the loneliness he felt living there and his longing to be back with loved ones in a familiar place - he learned that in Los Angeles, everyone has a car and there's no mingling in the streets like there is in New York. And then there's the smog...
In a 1992 interview on BBC radio, Hammond said: "When you listen to the song, you'd think this is a show stopper, and lyrically, you'd think I wrote it probably for the most beautiful woman that ever existed in the world. And in fact, The air that I breathe was written for quite an ugly person actually, I mean ugly outside, physically outside. She wasn't a great looking girl, but she was a terrific person inside. She was warm and kind.
This person was the person who gave me shelter in Los Angeles when I didn't have any place to stay. I had no money, I had no Green Card, I couldn't work, I could have been a homeless. I sat down with Mike Hazlewood, and I said 'Mike, this is what's happened to me, and this is the person.' And I think Mike came up with [the line] 'the air that I breathe.'
More than my story, it was because we lived in LA, and for the first time in our lives, we were introduced by smog. And every time we woke up, we'd look at the Hollywood Hills, and there was like a yellow monster up there. And I think that was his reason for coming up with [the line] 'the air that I breathe.' My reason was a love story, his was ecology or whatever you want to call it, you know. But it worked."