NEW DELHI/MUMBAI: Air India has returned to its shareholders for $1.5 billion, more than a year after Tata Sons halted fresh equity injections into the airline, as its turnaround proves costlier and slower than initially envisaged. The amount, reported by Reuters, would rank among the largest shareholder funding exercises since Tata Group regained control of the former state carrier in 2021.Air India needs capital, but the $1.5 billion will be injected in phases, people familiar with the matter said. Co-owner Singapore Airlines will contribute its 25% share. Tata Sons had paused additional equity support in the year to March 2026.Its investment in Air India stood unchanged at Rs 22,618 crore in the FY2026 report, the same level as a year earlier — indicating no fresh equity was infused during the year.
Request Underscores Multiple Challenges Facing Airline
Air India’s funding requirements were discussed at Tata Sons board meeting in June, chaired by N Chandrasekaran, the people said. The talks came against a backdrop of mounting losses and rising capital needs as the airline executes a multi-year transformation programme.Air India reported a loss of Rs 22,238 crore in FY2026, more than double the previous year’s deficit and the largest among Tata Group companies. With Tata Sons holding its equity exposure flat in FY2026, Air India likely relied on borrowings and other funding arrangements while management assessed the scale of shareholder support still required. The $1.5 billion ask suggests those resources are no longer sufficient for the next phase of investment. Air India and Tata Sons did not respond to queries.The equity capital request comes as Chandrasekaran prepares to step down as chairman in Feb 2027, after months of disagreements with controlling shareholder Tata Trusts chairman Noel Tata, partly over Air India’s mounting losses.At the May Tata Sons board meeting, which Noel Tata attended, former Air India chief executive Campbell Wilson presented a turnaround strategy, capital expenditure plan and the equity infusion needed to fund operations and fleet expansion, the people said. Chandrasekaran, in the FY2026 report, said Air India’s turnaround could take up to a decade, citing years-long supply-chain disruptions, the need to overhaul the airline’s legacy systems, culture and fleet, and the task of building a large cadre of technical and airline professionals. Air India has sought to defer deliveries of hundreds of jets on order from Airbus and Boeing to curb losses.Air India has been the worst-hit Indian carrier from the closure of Pakistani airspace since last April, given the volume of flights it runs west from its Delhi hub — from UAE to North America.
