Air India is seeking at least ₹10,000 crore ($1.1 billion) in financial support from its owners, Tata Sons and Singapore Airlines (SIA), said people familiar with the matter, as the airline grapples with the aftermath of a deadly plane crash, among other challenges, Bloomberg News reported on Thursday.
The request includes funds for overhauling Air India’s systems and services as well as developing in-house engineering and maintenance departments, some of the people said, requesting not to be identified as the information is not public.
The ailing carrier is far from its goal of breaking even operationally by the end of March next year after facing multiple setbacks.
The appeal for more funding underscores the challenges of operating in India’s aviation market, where many carriers have exited after burning cash.
Sector leader Interglobe Aviation, which operates the IndiGo fleet, is the only profitable domestic carrier with over 64 per cent market share.
The carrier is 74.9 per cent owned by the Tata Group, with the rest held by SIA.
Any financial support would be proportional to ownership, the people said, adding that the owners would decide if the funding would be an interest-free loan or via equity.
SIA “has been working closely with” Tata Sons to help with Air India’s transformation program, the carrier said in an email Friday. “This includes providing our expertise and support to Air India, where necessary,” it added, but directed all queries on financial requirements to Air India.
Air India’s pursuit of profitability was already tottering in early June as it had to fly longer hours for its non-stop west-bound flights from India after an armed border conflict in May with Pakistan led to airspace curbs.
The finances worsened after one of its Boeing 787 Dreamliners headed for London crashed immediately after takeoff from Ahmedabad on June 12, killing all but one on board. Safety concerns following the tragedy led to a system-wide audit by India’s aviation regulator. Air India also slashed international flights on widebody jets by 15 per cent starting June through August, which curbed revenue.
