Air India is seeking around $1.5 billion in fresh equity from Tata Sons and Singapore Airlines as the airline faces mounting losses and heavy costs linked to its ongoing turnaround, according to a Reuters report.

Air India has sought about $1.5 billion in fresh equity funding from its shareholders, Tata Sons and Singapore Airlines, as the airline looks to strengthen its finances and support an expensive transformation programme, Reuters reported on August 25, citing people familiar with the matter.

The funding request comes after Air India and its budget carrier Air India Express reported combined losses of around $2.33 billion for the financial year ended March, more than twice the previous year's deficit.

If approved, the proposed capital infusion would rank among the largest publicly reported shareholder funding requests since the Tata Group took control of the former state-owned airline in 2022.

Fresh Capital Sought

Air India is seeking the funds as it continues to invest heavily in fleet renewal, passenger services, technology and operational improvements.

According to the Reuters report, the airline wants the capital relatively quickly, although the proposed funding could be provided in multiple tranches rather than as a single payment.

The request is reportedly structured as fresh equity. Discussions remain underway, and there has been no final decision on the proposed investment.

The funding requirement highlights the financial pressure facing Air India as Tata Group attempts to turn the carrier into a competitive global airline.

Singapore Airlines Role

Singapore Airlines owns approximately 25 per cent of Air India and would need to contribute its share of any approved equity infusion, according to the report.

The ownership structure means that a major capital injection would require coordination between Tata Sons and Singapore Airlines.

Tata Group took control of Air India in 2022 after acquiring the airline from the Indian government. The group subsequently consolidated Air India and Air India Express as part of a broader restructuring of its aviation business.

The proposed funding would provide additional capital to support that transformation.

Losses Mount

The request comes after a difficult financial year for the group.

Air India and Air India Express together reported a $2.33-billion loss for the year ended March, with the combined deficit more than doubling from the previous year.

The financial performance has added pressure on Tata's efforts to reduce costs while simultaneously investing in the airline's long-term expansion.

Air India's turnaround requires substantial spending at a time when the carrier is also facing operational and geopolitical challenges.

Geopolitical Challenges

Air India's international operations have been affected by disruptions caused by the Israel-Iran conflict, which has complicated some international flight routes.

The airline has also faced restrictions on Indian carriers using Pakistani airspace, forcing aircraft to take longer routes on several international services.

Such disruptions can increase fuel consumption, flight times and operating costs while also affecting aircraft utilisation.

These pressures come on top of the airline's broader restructuring expenses.

Crash Fallout Continues

Air India is also dealing with the financial and operational consequences of the 2025 Ahmedabad plane crash, which killed 260 people.

The accident triggered intense scrutiny of aviation safety and placed additional pressure on the airline to strengthen its operational systems and safety processes.

Air India has been undertaking changes across its operations as part of its broader transformation programme.

The crash and its aftermath have added another layer of complexity to Tata's efforts to rebuild the airline's reputation and customer confidence.

Fleet Renewal Costs

Air India's transformation involves major spending on its fleet.

The airline has placed large aircraft orders with Airbus and Boeing as it seeks to expand and modernise its fleet.

At the same time, Air India is refurbishing existing aircraft and upgrading passenger cabins and onboard services.

Reuters reported earlier this year that Air India had sought to defer deliveries of hundreds of aircraft ordered from Airbus and Boeing as Tata Group pushed the airline to reduce costs and manage its financial position.

Technology And Operations

The turnaround extends beyond aircraft.

Tata Group is also working to replace Air India's legacy technology systems and overhaul operational processes.

The airline is seeking improvements across areas including customer experience, digital systems, organisational structures and internal processes.

These changes require significant investment but are considered central to the group's plan to make Air India more efficient and competitive.

The challenge is balancing those long-term investments with the immediate need to reduce losses and improve cash flow.

What Happens Next

The immediate focus is on whether Tata Sons and Singapore Airlines approve the proposed $1.5-billion equity infusion and how the capital would be distributed.

No final decision has been announced, and discussions are continuing.

If approved, the funds would provide Air India with additional financial support as it manages fleet investments, operational restructuring and ongoing international disruptions.

For Tata Group, the latest funding request underlines the scale of the challenge involved in transforming Air India after its return to private ownership.

For Singapore Airlines, any additional investment would reflect its continuing financial commitment to the Indian aviation market through its stake in Air India.

The airline's ability to reduce losses while completing its fleet, technology and operational transformation will remain crucial to the long-term success of the Tata Group's aviation strategy.

Note: This report is based on a Reuters report published on August 25, 2026, citing people familiar with the matter. The proposed funding remains under discussion and has not been presented as a final investment decision.