Air India Seeks $1.5 Billion Fresh Equity From Tata, Singapore Airlines

Air India is seeking around $1.5 billion in fresh equity from its owners, Tata Sons and Singapore Airlines, as the airline works through mounting losses and a major transformation programme, Reuters reported, citing two people familiar with the matter. The proposed funding would be one of the largest publicly reported requests for shareholder support since the Tata Group took control of the former state-owned carrier in 2022.

The airline and its budget subsidiary Air India Express reported combined losses of $2.33 billion for the financial year ended March, more than double the losses recorded in the previous year. The financial pressure comes as Air India undertakes a multi-billion-dollar turnaround involving fleet refurbishment, upgrades to legacy systems and changes to its operations and organisational culture.

The funding is being sought as fresh equity, with discussions still underway and no final decision taken, according to the sources. One source said Air India wants the funds immediately, although the proposed investment could be provided in tranches. Singapore Airlines, which holds around 25 per cent of Air India, would need to contribute its share for the proposed capital infusion to proceed. Air India and Tata Sons did not respond to Reuters' requests for comment.

Also Read: Tata Sons AGM Adjourned After Quorum Not Met, Days After Chandrasekaran’s Exit

Singapore Airlines said it was working closely with Tata Sons to support Air India's transformation programme but declined to comment on the carrier's financial position. Air India's turnaround has faced additional challenges, including the impact of Pakistan's airspace restrictions on Indian carriers, disruptions to international operations linked to the US-Israel conflict with Iran and the aftermath of a deadly crash last year that claimed 260 lives.

The airline is also dealing with wider operational and financial pressures as it attempts to modernise its fleet and reduce costs. Reuters previously reported that Air India had sought to defer deliveries of hundreds of aircraft ordered from Airbus and Boeing as the Tata Group pushes the carrier to improve its financial performance. Tata Sons Chairman N Chandrasekaran has previously indicated that rebuilding Air India could take up to a decade because of continuing supply-chain difficulties and the need to overhaul its systems, fleet and workplace culture.

The latest funding request comes as Chandrasekaran is preparing to step down as Tata Sons chairman in February after reported disagreements with the group's controlling charitable trust, including concerns related to Air India's losses. The proposed capital infusion, if approved, would provide additional funding for the airline's transformation but also underline the scale of the financial challenge facing Air India. One source indicated that the carrier could continue to require capital support in the coming years as its turnaround programme progresses.

Also Read: Tata Adopts Proprietary Technology To Manufacture Lithium Cells