Air India seeks $1.5 billion after record loss

Air India is seeking around $1.5 billion in new equity from its owners Tata Sons and Singapore Airlines, Reuters reports. Discussions are ongoing and no decision on the capital injection has yet been made. The money is expected to be paid out in several instalments if approved.  This is reported by Reuters.

The request follows a very weak financial year. Air India and low-cost carrier Air India Express together reported a loss of $2.33 billion for the financial year ending in March 2026. This is more than double the loss recorded the previous year. 

Singapore Airlines owns around 25 per cent of Air India and, according to Reuters, would need to contribute its share if the capital injection goes ahead. SIA has confirmed that it is working closely with Tata Sons to support Air India's transformation programme, but declined to comment on the financial details. (Reuters)

Costly and slow turnaround

Air India is in the midst of an extensive restructuring after Tata took over the formerly state-owned airline in 2022. The initiative includes a major fleet renewal, refurbishment of existing aircraft, modernisation of legacy IT systems, and changes to the organisation and corporate culture.

The turnaround has also been hit by delivery and supply chain problems, disruptions to the international aviation network, and the effects of last year's fatal accident in Ahmedabad. Airspace closures resulting from geopolitical conflicts have also affected operations. (Reuters)

Tata Sons chairman N. Chandrasekaran has previously said that it could take up to ten years to turn around Air India. The company has also sought to postpone deliveries of some of the hundreds of aircraft ordered from Airbus and Boeing, in an effort to reduce costs. 

New chief executive to take over

The need for capital comes as Air India changes chief executive. Tewolde Gebremariam, former chief executive of Ethiopian Airlines, has been appointed as the new chief executive and will succeed Campbell Wilson, who is leaving the role after nearly four years. Gebremariam will therefore be responsible for the next phase of the extensive turnaround. 

For Singapore Airlines, Air India's problems have already had noticeable consequences. The airline's share of Air India's losses has helped put pressure on SIA's own results. 

The new capital requirement also shows that the Tata Group's multi-billion-dollar project in the aviation sector will require further funding for several years to come.

Note: Tata is an  Indian conglomerate with 31 companies and operations in more than 100 countries. Tata Sons is the group's holding company and the company that controls and promotes the Tata companies.