Air India gets Rs 1,500-cr loan from Bank of India

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26 Aug, 2025 12:21

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Debt-laden Air India has received a loan worth of Rs 1,500 crore from Bank of India to meet urgent working capital needs less than a month after floating a tender in this regard, an airline source said.

For the second time in recent months, the flagship carrier has received loans from a public sector lender. Battling multiple headwinds, the disinvestment-bound airline has been working on ways to reduce its debt, including by way of selling non-core assets and expanding operations.

The source said the airline has received Rs 1,500 crore loan from Bank of India after the tender for the amount was floated last month in order to meet "urgent" working capital needs. A query sent to Bank of India remained unanswered.

A tender was issued by the carrier on October 18 in which it had sought government guarantee-backed short-term loans totalling up to Rs 1,500 crore to meet "its urgent working capital requirements".

Prior to that, the airline had borrowed around Rs 3,250 crore as short tenure loans from two lenders -- IndusInd Bank and Punjab National Bank, sources had said.

This loan too was for meeting urgent working capital needs and the tender was floated in September. In the last nearly three months, at least two public sector lenders -- Bank of India and Punjab National Bank -- have provided loans to the airline.

As part of efforts to revive the ailing carrier, which has a debt burden of more than Rs 50,000 crore, the government is in the process of finalising the contours of its strategic disinvestment.

Air India is surviving on taxpayers' money under the bailout package extended by the previous UPA government in 2012.

As part of the turnaround plan, the national carrier is to receive up to Rs 30,231 crore from the government over a ten-year period subject to meeting certain performance thresholds.

The Air India group flies to 44 overseas and 75 domestic destinations. There are flights to Copenhagen, Tokyo, Washington, Stockholm, Sydney, Hong Kong, Kabul, Colombo, Seoul, Singapore and London, among other foreign cities.