Air India Express has nearly doubled its borrowing capacity in just 21 months, raising the ceiling to ₹20,000 crore, as the Tata Group's low-cost carrier seeks additional financial muscle to navigate geopolitical disruptions, soaring fuel prices and mounting costs.
The increase, approved by shareholders at the airline's annual general meeting on 15 July, marks the second hike in six months and the fourth revision since the merger of AirAsia India with Air India Express.
The borrowing limit has risen from ₹11,600 crore in October 2024 to ₹14,000 crore a month later, ₹17,500 crore in February this year and now ₹20,000 crore. The latest approval comes even as the airline grapples with a difficult operating environment that has eroded profitability despite strong passenger demand.
"Due to prevailing geopolitical uncertainties and increase in fuel prices, Board of Directors of the Company envisages requirement of additional funds to support the business operations of the Company and accordingly, it is proposed to increase the overall borrowing limits by ₹2,500 crore, i.e. from ₹17,500 crore to ₹20,000 crore," Air India Express said in the explanatory statement accompanying the shareholder resolution filed with the ministry of corporate affairs.
The request underscores the financial pressures building within the Air India group as Tata Sons pursues one of the world's most ambitious airline turnaround programmes. Chairman N. Chandrasekaran, in his address to shareholders, said that Air India’s turnaround is a 5-10 year process, while pointing out to an exceptionally tough operating environment that airline faced in FY26 that include spare part supply chain disruptions, airspace restrictions over Pakistan, elevated fuel costs, geopolitical tensions, and the AI-171 crash in June leading to increased regulatory oversight, apart from legacy issues plaguing the carrier.
According to the Tata Sons Annual Report 2025-26, Air India and Air India Express together reported a combined net loss of ₹22,238 crore in FY26, more than double the ₹10,859 crore loss recorded a year earlier, while combined revenue declined nearly 9% to ₹71,870 crore.
Air India reported revenue of ₹51,452 crore and a loss of ₹15,368 crore during the year, while Air India Express posted revenue of ₹19,088 crore and a loss of ₹6,767 crore, highlighting the strain on both the full-service and low-cost businesses even as the group continued investment in fleet renewal, network expansion and product upgrades.
The financial performance contrasts sharply with that of market leader IndiGo. InterGlobe Aviation, which operates IndiGo, reported revenue of ₹84,962 crore in FY26, up from ₹80,802 crore a year earlier. Although the airline swung to a net loss of ₹2,394 crore, largely due to foreign exchange losses, it remained significantly more resilient than the Air India group while operating in the same environment of elevated fuel prices, Pakistan airspace closures, and geopolitical uncertainty.
The comparison also reflects differing funding priorities. IndiGo has sought shareholder approval to raise its borrowing limit by nearly 60% to ₹1.1 trillion, primarily to finance aircraft acquisitions, including Airbus A350 wide-body jets that will support its long-haul ambitions. It has an order book of nearly 900 jets.
India’s youngest airline, Akasa Air, also tripled its borrowing this year as the Mumbai-headquartered carrier looked to fund its growing operations.
Air India Express, in contrast, has explicitly linked its latest borrowing requirement to liquidity needs arising from geopolitical disruptions and higher fuel costs. The borrowing increase also comes at a critical juncture for the Air India group.
Air India Express is yet to announce a new chief executive after former CEO Aloke Singh’s exit following the completion of his tenure. Captain Hamish Maxwell took over as the Accountable Manager for Air India Express, following Singh's departure.
Air India’s chief executive Campbell Wilson is due to step down in September, with the Tata Group yet to announce his successor, even as it presses ahead with integrating its airlines and restoring profitability.