Air India is seeking approximately $1.5 billion in fresh equity from its owners, Tata Sons and Singapore Airlines, months after India's second-largest airline posted a record annual loss, two people familiar with the matter told Reuters.

The request would mark one of Air India's largest publicly reported asks for shareholder funding since Tata Group took control of the former state-owned carrier in 2022, underscoring the challenges facing the airline as it undergoes a multi-billion-dollar overhaul, including refurbishment of its existing fleet.

Air India and its budget arm, Air India Express, reported combined losses of $2.33 billion in the fiscal year ended March — more than double the previous year's losses. The mounting losses have also weighed on Singapore Airlines' own profits.

According to Reuters, one source said Air India wants the funds immediately, though the infusion is likely to happen in tranches, and that Singapore Airlines would need to contribute its share for the investment to proceed.

The funding is being sought in the form of fresh equity, the sources said, adding that discussions are ongoing and no final decision has been made. The sources spoke on condition of anonymity as they were not authorised to discuss the matter publicly.

Air India and Tata Sons did not respond to Reuters' requests for comment. Singapore Airlines, which holds around 25 percent of Air India, said it was working closely with Tata Sons to support the carrier's transformation programme, but it declined to comment on its finances.

Turnaround under pressure

Air India's difficulties have been compounded by Pakistan's airspace ban on Indian carriers, disruptions to its international network from the US-Israeli war with Iran, and the fallout from a deadly crash last year that killed 260 people.

The funding request comes as Tata Sons Chairman N. Chandrasekaran prepares to step down in February, following months of disagreement with the group's controlling charitable trust, partly over Air India's losses. Chandrasekaran has said the airline's turnaround could take up to a decade, citing persistent supply-chain disruptions and the need to overhaul its legacy systems, culture, and fleet.

Reuters reported earlier this year that Air India has also sought to defer deliveries of hundreds of jets on order from Airbus and Boeing, as Tata pushes the carrier to cut costs and reduce its record losses.

One source told Reuters that Air India is expected to continue requiring capital infusions in the coming years.

Source: Reuters