Funding request after record losses

Air India is seeking about $1.5 billion in fresh equity from its owners, Tata Sons and Singapore Airlines, according to a Reuters report cited by multiple outlets. The request comes months after the carrier posted a record annual loss, with its combined losses with budget unit Air India Express reaching $2.33 billion for the fiscal year ended March—more than double the previous year's losses. The losses have weighed on Singapore Airlines' profits, the report said.

The proposed funding would be one of the airline's largest publicly reported requests for shareholder capital since Tata took control in 2022. Two people familiar with the matter told Reuters that Air India wants the funds immediately, though the infusion is likely to happen in tranches. Singapore Airlines, which holds about a quarter of the airline, would need to contribute its share for the investment to proceed. Discussions are ongoing, and no final decision has been made, the sources said, speaking on condition of anonymity.

Context of a costly turnaround

The money is expected to be used as Air India continues a multi-billion-dollar transformation programme, including refurbishing its existing fleet and upgrading legacy systems. Tata Sons Chairman N. Chandrasekaran has previously said the turnaround could take as long as a decade, pointing to supply-chain problems and the need to overhaul the airline's legacy systems, culture, and fleet.

A source told Reuters: "Air India is expected to continue requiring capital infusions in the coming years." The airline has also sought to defer deliveries of hundreds of aircraft ordered from Airbus and Boeing, as Tata pushes to reduce costs and bring down losses.

Operational challenges

Air India's international operations have been disrupted by several issues. Reports mention Pakistan's closure of its airspace to Indian carriers, disruptions linked to the US-Israeli war with Iran, and the fallout from a deadly crash last year that killed 260 people. These factors have collided with the airline's broader transformation efforts.

Stakeholder responses and management changes

Singapore Airlines said it was working closely with Tata Sons to support Air India's transformation programme but declined to comment on the airline's finances. Air India and Tata Sons did not respond to Reuters requests for comment, as reported.

Separately, Tata Sons Chairman Chandrasekaran is said to step down in February next year—the timing has emerged following months of disagreements with the group's controlling charitable trust, partly over Air India's losses. Chandrasekaran has maintained that the carrier's revival will be a drawn-out process, pointing to the complexity of overhauling a legacy airline.