Air India has returned to its shareholders for $1.5 billion in fresh capital, more than a year after Tata Sons halted new equity injections into the airline, according to a Business Today report citing Reuters. The phased funding request, confirmed by people familiar with the matter, would rank among the largest shareholder funding exercises since the Tata Group regained control of the former state carrier in 2021. Co-owner Singapore Airlines will contribute its 25% share, the report said.
The request comes after Tata Sons kept its equity investment in Air India flat 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. According to the report, 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.
Capital ask and ownership structure
The $1.5 billion will be injected in phases, with Singapore Airlines funding its 25% share, according to the report. Tata Sons had paused additional equity support in the year to March 2026. The funding requirements were discussed at the 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.
| Funding metric | Value | Detail |
|---|---|---|
| Shareholder funding requested | $1.5 billion | Phased injection, reported by Reuters |
| Singapore Airlines participation | 25% | Co-owner contribution |
| Tata Sons equity investment, FY2026 | Rs 22,618 crore | Unchanged from prior year |
| Air India net loss, FY2026 | Rs 22,238 crore | More than double prior-year deficit |
Losses mount as turnaround stretches
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, the report said. In the FY2026 report, Chandrasekaran 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's turnaround could take up to a decade, Chandrasekaran said in the FY2026 report, according to Business Today.
To curb losses, Air India has sought to defer deliveries of hundreds of jets on order from Airbus and Boeing.
Governance transition and board discussions
The equity capital request comes as Chandrasekaran prepares to step down as chairman in February 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, attended by Noel Tata, 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.
Operational headwinds multiply
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, according to the report. The combination of the airspace closure, supply-chain disruptions and the need for fleet and systems overhaul is stretching the airline's finances as it executes its transformation programme.
Air India and Tata Sons did not respond to queries from Business Today.
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