Air India Ltd., the unprofitable Indian carrier, is seeking at least 100 billion rupees ($1.1 billion) in financial support from its owners Tata Sons Pvt. and Singapore Airlines Ltd., Bloomberg reported, as the airline faces mounting operational and safety challenges. The requested funding would be used to overhaul Air India’s systems and services, as well as develop in-house engineering and maintenance departments.
Sources familiar with the matter, who requested anonymity due to the private nature of the discussions, said the airline is far from achieving operational break-even by March next year. The pursuit of profitability has been complicated by multiple setbacks, including longer westbound flights caused by airspace restrictions after an armed border conflict with Pakistan in May, and a deadly crash in June involving a Boeing 787 Dreamliner near Ahmedabad, which killed all but one passenger on board. The crash prompted a system-wide audit by India’s aviation regulator and forced the airline to cut international widebody flights by 15% from June through August, further reducing revenue.
Air India is 74.9% owned by Tata Group, with Singapore Airlines holding the remainder. Any financial support would be proportional to ownership, and the owners will determine whether the funds are provided as an interest-free loan or through equity, Bloomberg reported. Spokespersons for Tata Sons, Air India, and Singapore Airlines did not respond to emailed requests for comment on the funding request.
Bloomberg noted that Singapore Airlines is actively involved in Air India’s engineering, operations, and airport services following the Ahmedabad crash. Currently, maintenance is handled by AI Engineering Services Ltd., a government-owned entity formerly part of Air India, but the proposed funding would allow the airline to expand its own capabilities, including constructing hangars at key airports. Airport services at six major airports are managed through Air India-Singapore Airport Terminal Services, a joint venture with SATS, with additional ground services being evaluated at other locations.
The funding appeal underscores the challenges of operating in India’s aviation market, where multiple carriers have exited after sustained losses. Interglobe Aviation Ltd., which operates the IndiGo fleet, remains the only profitable domestic airline, holding over 64% market share. Bloomberg analysts said Air India’s request highlights both the financial pressures on the carrier and the strategic importance of enhancing safety and operational infrastructure to remain competitive in the crowded domestic and international market.
