Air India is reportedly seeking around $1.5 billion in fresh equity funding from its owners, Tata Sons and Singapore Airlines, after the carrier and its budget unit Air India Express posted combined losses of $2.33 billion in the financial year ended March.
According to a Reuters report, the proposed funding could become one of Air India's largest publicly reported shareholder capital requests since the Tata Group regained control of the former state-owned airline in 2022.
The discussions are ongoing, and no final decision has been taken on the proposed equity infusion.
Air India losses more than double
Air India and Air India Express recorded combined losses of $2.33 billion during the financial year ended March, more than double the losses reported in the previous year.
The financial pressure has also affected Singapore Airlines, which holds around a 25% stake in Air India.
According to sources cited in the report, Air India wants the funds urgently, although the proposed capital infusion could be made in multiple tranches. Singapore Airlines would need to contribute its share of the fresh equity if the investment moves forward.
Air India and Singapore Airlines are reportedly working with Tata Sons on the airline's transformation programme.
Why is Air India seeking fresh funding?
The proposed $1.5 billion funding request comes as Air India continues a costly multi-billion-dollar transformation programme.
The airline is working to modernise its fleet, refurbish existing aircraft and overhaul legacy technology and operational systems inherited from its years as a state-owned carrier.
Air India has also faced several operational challenges, including disruptions caused by Pakistan's airspace restrictions and the wider impact of the US-Israel conflict with Iran on international operations.
The airline has reportedly sought to defer deliveries of hundreds of aircraft ordered from Airbus and Boeing as it looks to manage costs and reduce losses.
Air India's turnaround could take years
Tata Sons Chairman N. Chandrasekaran has previously indicated that Air India's turnaround could take up to a decade.
The airline continues to face supply-chain constraints, aircraft delivery delays and the challenge of rebuilding its systems, fleet and organisational culture while competing in India's rapidly expanding aviation market.
Sources cited by Reuters said Air India is likely to require additional capital infusions in the coming years as its transformation programme continues.
Conversation
Be kind and stay on topic. Comments are moderated; abuse, spam and personal attacks are removed. Report a problem