In Brief
Air India in financial crisis
Seeks help from Tata Sons, Singapore Airlines
Air India needs financial assistance of 10,000 crore rupees!
After the horrific plane crash in June that killed more than 240 passengers, Air India is now under severe financial pressure. According to a Bloomberg report, the airline has sought financial assistance of at least 10,000 crore rupees from its owner Tata Sons and partner Singapore Airlines. The company is trying to rebuild its reputation, modernize its fleet, and streamline operations.
According to the report, this proposed funding will help Air India comprehensively restructure its security, engineering, and maintenance systems. Employee training, cabin upgrades, and investment in operational technology will also be accelerated. Sources say that the structure of the funding is not yet finalized. It could be in the form of an interest-free loan or a new equity infusion in proportion to the ownership stakes of both companies.
Currently, Tata Group holds a 74.9% stake in Air India, while the remaining stake is with Singapore Airlines. In a statement to Reuters, Singapore Airlines said, "We are working closely with Tata Sons on Air India's ongoing transformation program, which includes providing operational expertise." However, Air India and Tata Sons have not yet publicly commented on this report.
The accident in June, considered the worst aviation accident in India in the last decade, has dealt a major blow to Air India's restructuring efforts. Investigative agencies are now probing technical and procedural errors, leading to stricter regulatory oversight of the airline.
The CEO of Air India assured employees this week that the internal review process and strengthening of safety standards are underway. The company has been implementing a comprehensive revival plan for the past two years. This plan includes expansion with mergers, purchasing 470 new aircraft from Airbus and Boeing, and resuming services on premium international routes.