Teams of autonomous agents working in coordination achieve greater efficiency and operation capability than agents performing solo-missions. Multi-agent systems have been investigated widely in the recent past owing to their wide applications and advantages. Formation control is one among the problems being investigated in both control and multi-agent systems paradigm. In formation control teams of agents moving together are required to maintain a pre-defined geometric configuration. Formation control problems have application in vehicle control, unmanned air-craft vehicles (UAVs), consensus and formation control of robots, in industrial robots to name a few. In order to maintain formation, agents in a team need to exchange information like relative displacement, velocity etc. These variables that are exchanged among agents in a team for maintaining formation are called coordination variables, and are used to achieve coordination among agents. Hence, there arises a need to transmit these coordination variables among all the agents in the network. One may visualize that any loss in coordination variable can jeopardize the formation. Communication channels are used for information exchange among agents and are the enabling factor of formation control algorithms.One major challenge in implementation of formation control problems stems from the packet loss that occur in these shared communication channel. In the presence of packet loss the coordination information among agents is lost. Moreover, there is a move to use wireless channels in formation control applications. It has been found in practice that packet losses are more pronounced in wireless channels, than their wired counterparts.In our analysis, we first show that packet loss may result in loss of rigidity. In turn this causes the entire formation to fail. Later, we present an estimation based formation control algorithm that is robust to packet loss among agents. The proposed estimation algorithm employs minimal spanning tree algorithm to compute the estimate of the node variables (coordination variables). Consequently, this reduces the communication overhead required for information exchange. Later, using simulation, we verify the data that is to be transmitted for optimal estimation of these variables in the event of a packet loss. Finally, the effectiveness of the proposed algorithm is illustrated using suitable simulation example.