- Air India seeks $1.5 billion in fresh equity from Tata Sons and Singapore Airlines
- The funding request is among the largest since Tata Group took control in 2022
- The airline is undergoing a multi-billion-dollar transformation and fleet refurbishment
Air India is seeking around $1.5 billion in fresh equity from its owners, Tata Sons and Singapore Airlines, as the airline steps up efforts to fund its turnaround amid mounting losses.
Reuters citing sources reported that the proposed funding would be one of the largest publicly reported requests for shareholder capital since Tata Group took control of the former state-owned airline in 2022. The airline is undergoing a multi-billion-dollar transformation that includes fleet refurbishment and an overhaul of its operations.
Air India and its budget carrier, Air India Express, reported combined losses of $2.33 billion for the fiscal year ended March, more than double the losses recorded a year earlier. The losses have also affected Singapore Airlines' profits.
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The funding is being sought as fresh equity, the sources said. Discussions are still underway and no final decision has been taken. The people spoke on condition of anonymity as they were not authorised to discuss the matter publicly.
Reuters reported that Air India and Tata Sons did not respond to their requests for comment. Singapore Airlines, which owns about 25% of Air India, said it was working closely with Tata Sons to support the airline's transformation programme but declined to comment on its finances.
The airline's turnaround has faced several setbacks, including Pakistan's airspace restrictions on Indian carriers, disruptions to international operations linked to the US-Israel war with Iran and the aftermath of a deadly crash last year that killed 260 people.
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The funding request also comes as Tata Sons Chairman N Chandrasekaran prepares to step down in February following disagreements with the group's controlling charitable trust, partly over Air India's losses.
Chandrasekaran has said the airline's turnaround could take up to a decade, pointing to continued supply-chain disruptions and the need to overhaul its legacy systems, workforce culture and fleet.
Air India has also sought to defer deliveries of hundreds of aircraft on order from Airbus and Boeing as Tata pushes the airline to reduce costs and bring down losses, Reuters reported earlier this year. “Air India is expected to continue requiring capital infusions in the coming years,” one of the sources said.
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