Air India is reportedly attempting to secure substantial financial help of $1.14 billion from Tata Sons and Singapore Airlines (SIA), as the national carrier struggles with financial and operational hiccups following the June plane crash that killed more than 240 passengers.
The request, according to a Bloomberg report, is aimed at stabilizing the airline, strengthening in-house engineering operations, and restoring its reputation amid rising competition in the Indian aviation market.
According to sources cited in the report, Air India management has reached out to its co-owners for funds to improve internal systems, modernize services, and build up maintenance and engineering capabilities.
Under the proposed funding, the money would be distributed proportionally to each owner based on their ownership stake (74.9% for TATA Sons and 25.1% for Singapore Airlines).
The owners are reportedly contemplating whether to provide the capital as an equity investment or interest-free loans, depending on the airline’s cash flow forecast and strategic recovery plan.
This reflects the difficulties faced by Air India as it transforms after the Tata Group acquired the airline in 2022, amid plans to modernize operations and create a better customer experience.
The crash of Air India’s Boeing 787-8 Dreamliner operating flight AI171 from Ahmedabad to London Gatwick on June 12 marked one of India’s deadliest aviation disasters, claiming 260 lives, including 241 passengers.
The tragedy prompted the worst crisis the airline has experienced in recent history, leading to an assessment of the regulatory safety of operating flights.
After the incident, the Directorate General of Civil Aviation (DGCA) launched a detailed evaluation of Air India’s fleet safety. The airline reduced widebody international departures by almost 15% between June and August.
The reduction, along with compensation costs and loss of passenger confidence, affected the revenues. At a recent aviation conference in Delhi, CEO Campbell Wilson described the crash as “absolutely devastating” for both the victims’ families and the airline staff.
He reiterated that preliminary investigations found no mechanical or operational fault, and that Air India remains committed to supporting affected families and first responders.
Also Read: AI in Aviation Safety: Lessons from the Tragic Air India Flight AI171 Crash
Beyond the crash, Air India continues to face increasing operational costs linked to extended flight routes following airspace restrictions with Pakistan. This has strained the company’s profitability.
The proposed funding will provide Air India with the ability to establish its own maintenance and hangar facilities at major airports, thereby reducing dependence on third parties and improving efficiency.
Singapore Airlines has a major role in providing support to Air India with engineering, operations, and airport services during the recovery phase.