Air India Express has raised its borrowing limit by 25% to ₹17,500 crore to fund near-term and next-fiscal operations, marking its third increase since merging AirAsia India in 2024 and underscoring continued turbulence at the Tata Group’s low-cost carrier.
The move signals deepening financial strain at the budget airline, which has seen losses widen sharply even as revenue grows. With crude prices rising and West Asian airspace closures disrupting operations, the higher borrowing ceiling gives the airline breathing room to manage cash flows—but also highlights the mounting pressure on the Tata Group’s aviation bet.
“In order to manage Q4 (January-March 2026) cash flows and support the annual operating plan, it is proposed to enhance the overall borrowing limits by ₹3,500 crore,” said a special resolution passed by Air India Express shareholders at a meeting on 24 February and filed with the ministry of corporate affairs on 20 March.
Under the Companies Act, 2013, a special resolution requires approval by at least 75% of the votes cast by shareholders.
“The airline has increased borrowing limits and it is perhaps also an indication that it wants to expand. The Middle East conflict has severely impacted its operations and profitability. May be it will try to increase domestic operations or tap the Indian market more, specially the smaller city—larger city routes, and is accordingly making provisions for funds. It is also not necessary they will be using the entire borrowing limit, it could be just an enabling provision too,” G.S. Bawa, secretary general, Air Travellers Association (ATA), a consumer rights group.
Air India Express did not respond to Mint’s queries.
Air India Express, a wholly-owned subsidiary of Air India, first raised its borrowing limit to ₹11,600 crore in October 2024, followed by a further increase to ₹14,000 crore in November 2024.
Debt and losses widen
The airline ended March 2025 with ₹10,087.4 crore in debt (excluding lease liabilities). With the revised ceiling, it can now borrow up to ₹17,500 crore — a figure that would exceed its ₹16,033 crore revenue last year.
Revenue rose 26% year-on-year to ₹16,033 crore in FY25. However, losses expanded more than fourfold to ₹5,822 crore.
Debt (excluding lease liabilities) jumped 61% from ₹6,261.7 crore a year earlier to ₹10,087.4 crore.
Put simply, Air India Express lost about ₹36 on every ₹100 of revenue.
In comparison, parent Air India’s revenue rose 13% to ₹61,080 crore in FY25. Under CEO Campbell Wilson, it cut losses to ₹3,976 crore from ₹5,031 crore a year earlier — translating to a loss of roughly ₹6.5 for every ₹100 earned.
Air India’s standalone borrowings (excluding lease liabilities) stood at ₹29,713 crore in FY25, down over 8% from ₹32,465 crore in FY24, as per filings with the ministry of corporate affairs.
Air India Express currently has a fleet of 105 aircraft, according to a company official. The airline expects to add 20–24 narrow-body planes this year, the official said.
Group picture
Air India’s standalone losses were ₹3,976 crore, while Air India Express’ standalone losses were ₹5,822 crore, taking combined losses from the two airline businesses to ₹9,798 crore.
A third entity, AI Fleet Services, which handles aircraft financing and foreign-currency borrowing, reported a loss of ₹442 crore. Two joint ventures — Air India SATS Airport Services and Airbus India Training Centre — reported a profit of ₹510 crore.
After removing intercompany revenue and profits, Air India Group’s consolidated profit totalled ₹10,859 crore last year.
The Tata Group’s aviation business continues to haemorrhage cash, with parent Tata Sons having spent ₹45,347 crore ($5.1 billion) so far.
The group has also invested nearly $4.7 billion in building its e-commerce businesses — BigBasket, Tata 1mg, Croma and Cliq — which remain loss-making.
Concerns over the lack of a clear profitability roadmap for some new ventures, along with Tata Group’s $14-billion semiconductor investment, prompted Tata Trusts chairman Noel Tata to raise the issue at last month’s Tata Sons board meeting. This led to the deferral of a decision on granting Tata Sons chairman N. Chandrasekaran a fresh five-year term.
Tata Trusts owns 65.9% of Tata Sons, the holding company of the Tata Group.
Leadership and competition
The airline has appointed Captain Hamish Maxwell as manager and key managerial personnel for a one-year tenure, after managing director Aloke Singh stepped down earlier this month.
Maxwell, who earlier worked at Singapore Airlines and Vistara, stands to earn up to ₹9.5 crore, according to disclosures.
Air India Express competes with IndiGo in domestic operations and also flies to West Asia and Southeast Asia.
On Monday, IndiGo appointed Singh as its chief strategy officer, marking the first leadership change at the country’s largest airline since founder Rahul Bhatia stepped in as interim chief executive following the resignation of Pieter Elbers.
