Air India Seeks US$1.5 Billion in Equity from Tata Sons and Singapore Airlines

Air India is seeking approximately US$1.5 billion in fresh equity from its owners, Tata Sons and Singapore Airlines (SIA), according to sources familiar with the matter. The request follows a fiscal year ended in March where the carrier and its budget unit, Air India Express, posted combined losses of US$2.33 billion, which is more than double the losses from the previous year. This represents one of the largest publicly reported requests for shareholder funding since Tata took control of the former state owned carrier in 2022.

Sources indicate that Air India wants the funds immediately, although the infusion would likely occur in tranches. Singapore Airlines, which holds around 25 percent of Air India, would need to contribute its share for the investment to proceed. While SIA stated it is working with Tata Sons to support the transformation programme, it declined to comment on specific finances. Air India and Tata Sons did not respond to requests for comment.

The funding request comes amid a multi billion dollar revamp involving fleet refurbishment and the overhaul of legacy systems and culture. The airline has faced several setbacks, including Pakistan's airspace ban, disruptions from the US Israeli war with Iran, and a deadly crash last year that killed 260 people. Additionally, Air India has sought to defer deliveries of hundreds of jets from Airbus and Boeing to cut costs.

Tata Sons Chair N Chandrasekaran is preparing to step down in February. This follows disagreements with the group's controlling charitable trust, partly regarding the losses at Air India. Chandrasekaran has noted that the turnaround could take up to a decade due to supply chain disruptions and internal overhauls. Sources expect the airline to require further capital infusions in the coming years.