Source NDTV
NEW DELHI — Air India has approached its co-owners, Tata Sons and Singapore Airlines, seeking roughly $1.5 billion in fresh equity to navigate escalating financial pressures and fund its ongoing multi-billion-dollar overhaul.
The proposed capital injection marks one of the largest shareholder funding requests since the Tata Group took control of the formerly state-owned carrier in 2022. If approved, the funds are expected to be disbursed in tranches, with Singapore Airlines contributing in proportion to its roughly 25% stake.
The funding request follows a difficult financial period for the carrier. Air India and its low-cost subsidiary, Air India Express, recorded combined annual losses of $2.33 billion for the fiscal year ending in March—more than double the deficit from the prior year. The persistent red ink has also begun to weigh on the earnings of Singapore Airlines.
The carrier’s turnaround trajectory has contended with several operational and structural hurdles:
Massive Fleet Modernization: The airline is executing extensive cabin retrofits and refurbishing legacy aircraft while balancing large-scale aircraft orders.
Supply-Chain Pressures: Protracted global supply bottlenecks and rising maintenance costs have slowed fleet upgrades, prompting discussions around deferring deliveries for selected aircraft.
Operational Headwinds: Regional airspace restrictions and international route realignments have added friction to long-haul flight operations.
The request coincides with a broader leadership transition at parent company Tata Sons, where Chairman N. Chandrasekaran is preparing to conclude his term. Chandrasekaran has previously cautioned that stabilizing Air India’s legacy operations, culture, and fleet into a world-class competitor could take up to a decade.
While Singapore Airlines reiterated that it continues to work closely with Tata Sons to support Air India’s transformation program, formal decisions on the equity infusion remain under internal review.
