Tata Sons may infuse more capital into Air India amid aviation sector challenges, says N Chandrasekaran

Tata Sons Chairman N Chandrasekaran has indicated that the conglomerate could consider further capital infusion into Air India, should the need arise. Speaking on the sidelines of a JRD Tata Memorial Trust event, Chandrasekaran addressed the current volatility in the aviation sector, citing disruptions in global supply chains, capital churn, and geopolitical tensions as principal obstacles. "If there is a requirement for it, we can look into it," he told Hindu Businessline, when questioned about potential funding, though he offered no further details or confirmation regarding a specific request from Air India for such support.

Air India, which was reacquired by the Tata group in 2021, continues to operate in a challenging environment and reported a consolidated net loss of Rs 10,859 crore on revenue of Rs 78,636 crore for FY25. According to sources, the airline is seeking additional funds of up to Rs 10,000 crore from its promoters, Tata Sons and Singapore Airlines, as both stakeholders had already infused overRs ₹9,500 crore during the financial year. Chandrasekaran underscored that for Tata, aviation is more than a commercial venture, highlighting a sense of responsibility towards the sector.

Describing the prevailing conditions, Chandrasekaran pointed to ongoing supply chain issues that complicate the timely addition of new aircraft and equipment. He remarked that the availability of parts, infrastructure, and new fleet remains "pretty unpredictable". As he elaborated, "Every plan that you have is becoming difficult because of the situations that you face in this area," reflecting the operational hurdles confronting Air India and the wider industry.

Addressing the financial demands of running an airline, Chandrasekaran noted the cyclical nature of capital allocation and returns: "You put capital you need to produce returns. And only then you can put fresh capital. It’s like a cycle, you need to constantly keep upgrading." He additionally observed that aviation operates with "very thin margins" and described its "love-hate relationship with oil prices," adding, "And it has a love-hate relationship with oil prices, so there are several aspects that you have to manage."

Despite these challenges, Chandrasekaran reaffirmed Tata's commitment to Air India's transformation plan. The airline is set to modernise 95–99 per cent of its fleet within three years, with the addition of new planes expected monthly. "We will start getting new plans every month over the next three years," he said, while also stressing, "But we have to work on each one of these dimensions, that’s the commitment we are working toward," as the group pursues both operational improvements and customer service enhancements.

Chandrasekaran also addressed the impact of external factors such as geopolitical tensions and airspace closures, which can lead to longer flight times, higher fuel consumption, and reduced payloads. "Your flights take longer, fuel costs go up, payload decreases and you irritate the customers. So we have to manage all this, but then the demand is very high, and the aspirations of Indians are growing," he said, outlining the balance required to navigate industry volatility and meet rising passenger expectations.