Tata and Singapore Airlines in talks to fund Air India after ₹22,000 crore loss

Tata Group and Singapore Airlines are in discussions to inject fresh capital into Air India after the carrier reported a wider-than-expected annual loss of more than ₹22,000 crore.

The talks come as the airline grapples with operational disruptions, rising costs and internal challenges, placing renewed pressure on its balance sheet.

Shareholders weigh funding support

According to Bloomberg, Tata Group - Air India’s controlling shareholder - and Singapore Airlines, which holds a 25.1% stake, are evaluating a capital infusion to stabilise the airline’s finances.

The size of the funding is still under discussion and may fall short of the airline’s total requirements, meaning Air India could need to explore additional financing options, the report said, citing people familiar with the matter.

Representatives of Tata Group and Air India did not respond to queries, while Singapore Airlines declined to comment, according to Bloomberg.

Losses exceed internal estimates

The airline’s loss for the financial year ended March 31 exceeded earlier expectations. According to Bloomberg, the figure is higher than a previously reported internal estimate of about $1.6 billion.

The financial setback comes after a year marked by multiple disruptions, including a fatal Boeing 787 Dreamliner crash, closure of Pakistani airspace, and ongoing geopolitical tensions in West Asia.

These factors collectively disrupted operations and increased costs, particularly on long-haul routes.

A year of operational setbacks

According to Bloomberg, Air India began the fiscal year on a relatively positive note, posting operating profits in early April 2025. However, conditions deteriorated after Pakistan closed its airspace in May, forcing airlines to take longer routes to Europe and the US.

The situation worsened following a deadly Dreamliner crash in June, which resulted in over 240 fatalities and led the airline to scale back both domestic and international services.

Additional pressures came from higher fuel costs and reduced access to key markets. West Asia — accounting for around 16% of Air India’s total capacity — has been significantly impacted by ongoing conflict, further affecting routes and revenues.

Leadership and performance pressures

The losses come at a sensitive time for the airline’s leadership and turnaround plans.

Chief Executive Officer Campbell Wilson has announced his intention to step down later this year, while the airline has also faced scrutiny over safety performance, ranking lowest in a recent regulatory audit, according to Bloomberg.

Despite ambitious fleet expansion plans, Air India has struggled to improve yields and service levels in line with expectations.

Wider implications for stakeholders

The airline’s financial performance is also weighing on its investors. Singapore Airlines, which acquired its stake following the merger of Vistara with Air India in 2024, has seen its own earnings affected by the carrier’s deteriorating performance, Bloomberg reported.

At the same time, lenders remain cautious about the aviation sector following recent bankruptcies, making shareholder-backed funding a critical option for the airline.

As Air India navigates a mix of operational disruption and financial strain, the proposed capital infusion may provide short-term relief but not a complete solution.

The airline’s recovery will depend on restoring route stability, improving operational performance and managing costs in a volatile global aviation environment.