Air India seeks $1.5bn capital infusion as losses double

Air India has approached its parent company Tata Group and strategic partner Singapore Airlines for a $1.5 billion capital injection as mounting losses threaten the carrier's financial stability. The dual request underscores the severity of operational challenges facing India's flag carrier, which has struggled to return to profitability despite restructuring efforts and increased domestic capacity.

The airline and its low-cost arm Air India Express together reported losses exceeding $2.33 billion in the fiscal year that concluded in March, more than double the previous year's deficit. The deterioration in financial performance reflects elevated fuel costs, intense competitive pressures in India's aviation sector, and operational headwinds that have impacted the carrier's margins.

Air India has been undergoing substantial transformation since Tata regained majority control in 2021, including fleet modernization and network optimization initiatives. However, these efforts have not yet translated into sustained profitability as the carrier competes with rival airlines in one of Asia's fastest-growing aviation markets.

The capital infusion request signals the need for continued financial support to stabilize operations and fund ongoing restructuring programmes. Singapore Airlines, which holds a minority stake in Air India, will play a key role in determining the extent of additional investment as the carrier seeks to achieve sustainable returns.