Air India wants $1.5B funding from Tata Sons, Singapore Airlines
What's the story
Air India is looking for a capital infusion of approximately $1.5 billion from its owners Tata Sons and Singapore Airlines, Reuters reported citing two people familiar with the matter. The funding would be in the form of fresh equity and could be done in tranches. This is one of Air India's biggest publicly known requests for shareholder funding since Tata took over the former state-owned airline in 2022.
Financial struggles
Funding request comes after losses
The funding request comes after Air India and its budget unit, Air India Express, reported a combined loss of $2.33 billion for the fiscal year ending in March.
This is more than double the losses from the previous year.
The financial woes have also affected the profits of Singapore Airlines.
Operational hurdles
Challenges in turning around its fortunes
Air India is facing several challenges as it tries to turn around its fortunes.
These include Pakistan's ban on Indian carriers, disruptions caused by the US-Israel war with Iran, and the aftermath of a deadly crash last year that killed 260 people.
The airline has also sought to defer deliveries of hundreds of jets from Airbus and Boeing amid cost-cutting measures aimed at reducing record losses.
Long-term recovery
Could take 10 years to turn around Air India
Tata Sons Chair N Chandrasekaran has said that Air India's turnaround could take up to a decade.
He cited persistent supply-chain disruptions and the need to overhaul the airline's legacy systems, culture, and fleet as major challenges.
Despite these hurdles, Singapore Airlines is expected to contribute its share of the proposed infusion if funding goes ahead.