Air India Loan: Tata Group’s airline company Air India is working on a major expansion plan. The company has to spend around Rs. 10,000 crore new loans are required. But this time the way to increase the loan is not so easy. Even though Air India has an excellent ‘AAA’ credit rating, some private banks hesitate before extending new loans. These banks are troubled by the continuous losses of the company.

A major cause of concern for banks

People with knowledge of the matter say private banks want to be fully assured of Air India’s cash flow. Banks want to know how the company will be profitable in the future. In fact, Air India’s total loss in the fiscal year ending March 2026 has doubled to Rs. 22,238 crores. A year ago this loss was Rs. 10,858 crores. Foreign exchange losses are also exacerbating this deficit. Foreign exchange loss which last year was Rs. 1,545 crore this year it increased to Rs. 7,388 crores.

A major concern of the banks is that if the company does not become profitable, it will have to depend entirely on the funds received from the Tata Group to repay the loan.

Government banks ready to trust Tata

On one hand, private banks are raising questions, on the other hand, government banks are ready to give loans to the company. The name of Tata Group is enough for these banks. Air India’s high credit rating assures banks that the risk here is very low. Air India currently has a debt of around Rs 40,000 crore. According to rating agency CRISIL, State Bank of India has the largest share in this. This is followed by Bank of Baroda and Punjab National Bank.

Commenting on the matter, a senior Tata group official has clarified that due to the strength of the Tata brand, none of their companies have ever faced any problem in raising funds. Currently, Tata Sons owns 74.9 percent stake in Air India, while Singapore Airlines holds the remaining 25.1 percent stake. Banks are relieved by the fact that Tata Sons will retain at least 51 percent stake in the company going forward.

Preparing for a major expansion of the company

Aviation sector is a business that requires a lot of money initially. According to an official involved in the matter, there is nothing unusual about the airline’s profits. It takes time for a new business to become profitable. At present, negotiations are going on with the banks regarding the interest rate. The company has already taken a substantial loan from a major bank.

Apart from this, Tata Sons invested Rs. More than 10,000 crores of new capital has been infused. This is Tata’s biggest investment in the company after buying Air India in 2021. Lending banks also want to clarify their position on the continuation of Tata Sons chairman N Chandrasekaran in the post. Chandrasekaran is currently also the Chairman of Air India Board. Air India is strategically important to the Tata Group. With the acquisition of this company, the Tata Group has become the second largest aviation player in the country after IndiGo.