Air India is seeking an urgent financial infusion of at least $1.1 billion from its owners, Tata Sons Pvt. and Singapore Airlines Ltd., as the beleaguered carrier grapples with the severe fallout from a deadly plane crash and a series of operational setbacks that have derailed its turnaround plans.
According to a Bloomberg report that cited people familiar with the matter, the capital is essential for a major strategic overhaul aimed at pulling the airline back from the brink in India’s notoriously difficult aviation market.
The carrier’s path to profitability, already a significant challenge, has been severely compromised by a string of recent crises.
Its financial situation began to worsen in early June after an armed border conflict with Pakistan led to airspace restrictions, forcing its non-stop westbound flights to take longer, more costly routes.
The situation turned critical after one of its Boeing 787 Dreamliners crashed after takeoff from Ahmedabad on June 12, killing all but one person on board.
The tragedy triggered a system-wide safety audit by India’s aviation regulator and forced Air India to slash its international widebody flights by 15% through August, delivering a major blow to its revenue.
The path forward: a $1.1 billion overhaul
The requested funds are not just to cover losses but to finance a fundamental transformation of the airline’s capabilities.
The people said the plan includes a complete overhaul of Air India’s systems and services, with a primary focus on developing its own in-house engineering and maintenance departments.
Currently, maintenance is handled by a government-owned entity.
The new capital would allow Air India to build its own hangars at key airports, giving it greater control over quality, costs, and turnaround times.
The airline is also reviewing its ground handling and airport services operations.
Ownership and market realities
The financial support would be proportional to the ownership structure, with the Tata Group holding a 74.9% stake and Singapore Airlines (SIA) holding the remainder.
The owners will decide whether the funding will be structured as an interest-free loan or a fresh equity injection, the report further said.
Spokespersons for Tata Sons and Air India did not respond to requests for comment.
In an email, SIA told Bloomberg that it “has been working closely with” Tata Sons on the transformation program and providing expertise “where necessary,” but directed financial queries to Air India.
The appeal underscores the immense challenges of India’s aviation sector, where intense competition and high costs have led to the collapse of many carriers.
Currently, IndiGo is the only major profitable domestic airline, controlling over 64% of the market.
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