Mumbai | September 30, 2026
Air India is seeking around ₹10,000 crore in fresh bank loans to support fleet expansion, aircraft refurbishment and operating expenses. However, some lenders are seeking greater clarity on the airline’s cash flows and turnaround plans before committing additional funds.
The funding discussions come as the Tata Group-backed airline continues to report significant losses and carries substantial debt.
Lenders Seek Greater Cash-Flow Visibility
According to people familiar with the matter cited by The Economic Times, some private-sector banks have been cautious about extending new credit because of uncertainty around Air India’s cash generation and profitability.
State-owned banks, meanwhile, are reportedly willing to renew existing credit facilities, citing Air India’s credit rating and its relationship with the Tata Group.
A senior Tata Group official said the airline’s aviation business is still in a development phase and that discussions with lenders over financing terms are continuing.
Air India’s Losses More Than Double
Air India’s consolidated loss increased to ₹22,238 crore in FY2025-26, compared with ₹10,859 crore in the previous financial year. Foreign-exchange losses also increased sharply, reaching ₹7,388 crore from ₹1,545 crore a year earlier.
The airline’s financial performance has been affected by several factors, including operational challenges, aircraft-related costs, geopolitical disruptions and changes in travel routes.
Air India’s outstanding debt facilities are estimated at nearly ₹40,000 crore, with State Bank of India, Bank of Baroda and Punjab National Bank among its major lenders.
Tata Sons Has Approved Fresh Capital
The proposed bank borrowing comes alongside a separate capital-support plan from Tata Sons.
In June, the Tata Sons board approved a fresh capital infusion of more than ₹10,000 crore into Air India. The investment would represent one of the group’s largest funding commitments to the airline since its acquisition in 2021.
Tata Sons currently remains the majority shareholder, while Singapore Airlines holds a significant minority stake.
Lenders are also seeking greater clarity around Air India’s long-term business plan and the continuation of support from its promoter, according to the people cited in the report.
Funding Needed for Fleet Expansion
Air India’s financing requirements are linked to its broader transformation programme, including fleet expansion, aircraft upgrades and operational spending.
The airline has been pursuing a major fleet and network expansion following its acquisition by the Tata Group and the subsequent merger with Vistara.
The challenge now is to balance these investment requirements with the airline’s current losses, debt obligations and need to improve cash generation.
