Tata group may need to invest $1 billion to upgrade Air India fleet

The government is expected to issue a letter of intent (LoI) to Tata Sons next week, following which the share purchase agreement will be formalised

The Tata group may have to deploy upwards of $1 billion to improve the airline’s passenger reservation system, upgrade and refurbish Air India’s fleet, primarily the wide-body aircraft which are the mainstay for the airline’s international operations, people in the know said.

While the group has not yet decided on how it intends to integrate Air India with its existing airlines AirAsia India and Vistara, sources said the first task will be to refinance Air India’s existing loans, upgrade its aircraft gradually, and rewrite multiple business contracts with vendors and suppliers.

“They will have to do 100 things to stabilise the airline